00:01
Hello students we are going to write here trans tax sells its products for hundred dollars marginal cost is a constant 70 per unit and fixed cost is given we are going to write here what is break even quantity and break even revenue so if i write here for this break even so let's erase this to make it more clear break even quantity would be if i write here this must be fixed cost that must be divided by contribution per unit.
00:45
So if i write here for this, this will come out as, so for this we are going to calculate our contribution per unit.
00:54
Contribution per unit would be if i calculate this, this must be selling price minus marginal cost, marginal cost contribution per unit, contribution per unit.
01:24
So let's erase this to make it more clear contribution per unit.
01:31
So if i write here, so now if i write your selling price would be 100 and this is marginal cost per unit is 100.
01:39
So this is 100 minus this is 70 so this must be dollars 30 so we are going to write here now we are going to calculate break even quantity that will be if i write here for this so break even break even quantity would be quantity would be fixed cost so fixed cost is 35 to 50 so this is 35 to 50 so this is 35, 250 divided by if i write here for this, this is 30 and that is equivalent to 1175 unit.
02:22
So if i write here what would be our break even revenue...