Minist corporation sells a single product for $15 per unit. last year, the company's sales revenue was $225,000 and its net operating income was $18,000. if fixed expenses totaled $72,000 for the year, the break-even point in unit sales was:

12000 units

Explanation:

Given:

Selling price of a single product = $ 15

Sales revenue of the company = $ 225,000

Net operating income = $ 18,000

Fixed total expenses = $ 72,000

Now,

The number of units sold  = $ 225,000 / 15 = 15000

Operating income = Sales – variable cost – fixed cost

on substituting the value,

$ 18,000 = $ 225,000 – $ 72,000 – Variable cost

or

Variable cost = $ 225,000-72,000-18,000  = $ 135,000

Now, the variable cost for the single unit = $ 135,000 / 15000 = $ 9

thus,

Break even point = Total fixed cost/( Selling price – variable cost)per unit

or

Break even point = $ 72000 / ( $ 15 – $ 9)

or

Break even point = 12000 units

business modeling is correct

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

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