SOLUTION: (Break-even point and operating leverage) Allison Radios manufactures a complete line of radio and communication equipment for law enforcement agencies. The average selling price o

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Question 206461: (Break-even point and operating leverage) Allison Radios manufactures a complete line of radio and communication equipment for law enforcement agencies. The average selling price of its finished product is $180 per unit. The variable cost for these same units is $126. Allison Radios incurs fixed costs of $540,000 per year.
Answer by rfer(16322) About Me  (Show Source):
You can put this solution on YOUR website!
The selling price minus the variable cost is the profit per unit before the fixed cost is concidered. So you have $54 per unit to ofset the fixed costs.
540000/(180-126)=10,000 units break even point