What is the formula for breakeven analysis?

Question

What if the formula for breakeven analysis? The question is DigiCom is manufacturing a product that it will sell for $120.
They have a large infrastructure that is costly to maintain but cheap to run. Their monthly fixed costs are $5,300 and their unit variable costs are $10.
What is the monthly break-even volume for DigiCom? ( in units)
and What is the Net Income of DigiCom if unit sales are twice the break-even point for a given month? and What is the monthly Net Income of DigiCom if unit sales are 24% above the break-even point?

Answer 1

Easy, but don't feel embarrassed. Next time, just do it on pen and paper and you'll see how easy it is to do.

Alright so we have to make revenues = costs. Right?

Digicom makes $120/ unit sold - $10/ unit sold for prod. costs. There's also the constant maintenance of $5300/ month for the equipment. So we get this:

$120x {revenue} = $5300 + $10x {costs}
Subtract 10x from each side....
$110x = $5300
and divide by 110.
x = 48.18
so the company has to sell 49 UNITS PER MONTH to break even (remember, the maintenance is monthly, so Digicom has to break even every month).