Percy’s pics, inc. is in the business of selling small picture frames and had the following information available: cost of frames $8 selling price of frames 17 monthly rent 500 shipping cost for each frame 3 what is the company break-even point, rounded to the nearest whole unit?

84 units

Explanation:

The break-even point occurs when total revenue equals total expenses. In this example, we need to find out how many frames units will get the company to break-even.

Monthly Rent is the only fixed cost while cost of frames and shipping cost are the variable costs. Selling price of frames is the only source of revenue.

Cash flow can be represented as follows:

Therefore, the company needs to sell roughly 84 units to break-even since they would be at loss with 83 units.

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