Compute the break-even point in units using (a) a mathematical equation and (b) contribution margin…

Lombardi Company has a unit selling price of $400, variable costs per unit of $240, and fixed costs of $180,000. Compute the break-even point in units using (a) a mathematical equation and (b) contribution margin per unit.

Apply the formula: Sales – Variable costs – Fixed costs = Net income.

Apply the formula: Fixed costs ÷ Contribution margin per unit = Break-even point in units.