Question

Shock Electronics sells portable heaters for \(35 per unit, and the variable cost to produce them is \)22. Mr. Amps estimates that the fixed costs are $97,500.

b. Fill in the table (in dollars) to illustrate the break-even point has been achieved.

Sales
Fixed cost
Total variable cost
Net profit (loss)

Short answer

Sales	$262,500
Fixed cost	(97,500)
Total variable cost	(165,000)
Net profit (loss)	0

Step-by-step solution

Sales

$\begin{array}{rcl}\mathrm{Sales}& =& \mathrm{Number}\mathrm{of}\mathrm{break}\mathrm{even}\mathrm{units}\times \mathrm{Selling}\mathrm{price}\mathrm{per}\mathrm{unit}\\ & =& 7,500\times \$35\\ & =& \$262,500\end{array}$

Total variable cost

$\begin{array}{rcl}\mathrm{Variable}\mathrm{cost}& =& \mathrm{Number}\mathrm{of}\mathrm{units}\mathrm{sold}\times \mathrm{Variablecost}\mathrm{per}\mathrm{unit}\\ & =& 7,500\times \$22\\ & =& \$165,000\end{array}$