Operation Leverage Ratios
Air Filter, Inc., sells its products for $6 per unit. It has the following costs:
Rent . . . . . . . . . . . . . . . . . . . . . . . . . $100,000
Factory labor. . . . . . . . . . . . . . . . . . . $1.20 per unit
Executive salaries. . . . . . . . . . . . . . . $89,000
Raw material. . . . . . . . . . . . . . . . . . . $.60 per unit
Separate the expenses between fixed and variable cost per unit. Using this information and the sales price per unit of $6, compute the break-even point.