Use the information below to answer the following question(s).Brian O'Neil intends to sell his customers a special round-trip airline ticket package.He is able to purchase the package from the airline carrier for $400 each.The airline intends to reimburse Brian for any unsold ticket packages.The round-trip tickets will be sold for $500 each.Brian has a tax rate of 30% on his business income.
-What would his break-even point be assuming Brian incurred $31,200 in fixed expenses?
A)312 packages
B)232 packages
C)125 packages
D)110 packages
E)100 packages

Question

Quizplus · Accepted Answer

The break-even point is calculated by dividing the fixed expenses by the contribution margin per package. The contribution margin per package is the selling price minus the cost price, which is $500 - $400 = $100. The break-even point is $31,200 / $100 = 312 packages.

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