EXERCISE 6-15 (30 MINUTES)

1. Sales = Variable expenses + Fixed expenses + Profits

$30Q = $12Q + $216,000 + $0

$18Q = $216,000

Q = $216,000 ÷ $18 per unit

Q = 12,000 units, or at $30 per unit, $360,000

Alternative solution:

Fixed expenses

Break-even point in unit sales = Unit contribution margin

$216,000

= = 12,000 units

$18 per unit

or at $30 per unit, $360,000