Instagram Solution 8/18

 

The break-even point is the point at which net profit equals $0.

 

You can solve this using formulas taught in the books:

 

Break-Even in Units = Fixed Costs / Contribution Margin Per Unit

 

X = $1,200 / ($12-$4)

 

X = 150 Units

 

 

You can also just think logically. If they make $8 on every t-shirt, they'll have to sell 150 before they've made $1,200 and covered there costs. At that point, every additional t-shirt sold is $8 of profit, which is the contribution margin per unit.


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