Pattigan’s Planes produces model airplanes which sell for $50 each. If Pattigan’s Planes has $50,000 in fixed costs and pays $30 in variable costs per unit, what is Pattigan’s Planes’ break-even point?

In this practice, we're told that Patigan's Planes sells their model planes for $$50 each, they have 50$$,000 in fixed cost, and they have $$30 in variable cost per model plane. We'd like to calculate their break-even point. So, we simply need to remember that the break-even point for a business is going to be equal to their fixed cost, in this case, 50$$,000 divided by their contribution. margin. So this business's contribution margin is going to be their sales price of $$50 minus their variable cost per unit of 30. So $$this means that our break-even point is just $50,000 divided by 20, which means that in order to break even, Patigan's planes needs to sell 2500 model airplanes. B is the best answer.

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Pattigan’s Planes produces model airplanes which sell for \$50 each. If Pattigan’s Planes has \$50,000 in fixed costs and pays \$30 in variable costs per unit, what is Pattigan’s Planes’ break-even point?

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