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Since the units produce and sold in (thousands), fixed costs (60,000), price ($2) and variable costs per unit ($0.80) (Block-Hirt-2004). First fixed costs are $60,000, regardless of volume and the variable costs is at ($0.80 per unit) that is added to the fixed costs to determine the total costs at any giving point. To determine the total revenue line by multiplying price ($2) time volume. Of a particular interest can be the break-even (BE) point of $50,000 units, to find the total costs and total revenue lines intersect. Example:
Units = 50,000
Total Variable Costs (TVC) Fixed Costs (FC) Total Costs (TC) Total Revenue (TR) Operating Income (Loss)
(50,000 x $0...
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