# How to calculate break-even point in dollar

Piedmont Fasteners Corporation makes three different clothing fasteners at its manufacturing facility in North Carolina. Data concerning these products appear below:

 Velcro Metal Nylon Normal annual sales volume 100,000 units 200,000 units 400,000 units Unit selling price \$1.65 \$1.50 \$0.85 Variable cost per unit \$1.25 \$0.70 \$0.25

Total fixed expenses are \$400,000 per year.

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All three products are sold in highly competitive markets, so the company is unable to raise its prices without losing unacceptably large numbers of customers.

The company has a very effective lean production system, so there is no beginning or ending work in process or finished-goods inventories.

Using the module readings, the Argosy University online library resources, and the Internet, research break-even point and costing systems. Analyze the case based on your research and what you have learned so far in the course.

Respond to the following:

• Calculate the company’s overall break-even point in total sales dollars. Explain your methodology (approximately 2 pages).
• Of the total fixed costs of \$400,000: \$20,000 could be avoided if the Velcro product were dropped, \$80,000 if the Metal product were dropped, and \$60,000 if the Nylon product were dropped. The remaining fixed costs of \$240,000 consist of common fixed costs such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely (approximately 2 pages):
1. Calculate the break-even point in units for each product. Explain your methodology.
2. Determine the overall profit of the company if the company sells exactly the break-even quantity of each product. Present your results.
• Evaluate costing systems for this company. Explain if this company should be using a job order or process-costing system to accumulate costs (1 page).

Be sure to include your calculations in Microsoft Excel format.