Northwood Company manufactures basketballs. The company makes a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labour workers. Thus, variable costs are high, totaling $15 per unit. In the year 2007, the company sold 30,000 of these balls, with the following results:
Sales (30,000 units) $750,000
Variable costs 450,000
Contribution margin 300,000
Fixed costs 210,000
Income before taxes 90,000
Required:
a) Compute the break-even point in units and dollars