Hamburger Joe’s sells the best burgers in town. The variable unit cost for making one burger is $.97. The fixed cost of making burgers for 12 months will be a total of: $140,000. Remember, fixed costs cover things like your rent, your phone bill, and insurance coverage – these items tend not to vary in amount per month over the term of one year.
If you charge $1.99 for your burger, how many burgers will you have to sell before you make back your total cost?
This problem explains how to calculate the break even point using given data in the problem.