Fixed cost(FC) = $15000
Variable cost(VC) = direct labor cost + material cost = $3.75+$4.50 = $8.25
Selling price(SP) = $12.50
a) Break even point in units = FC / (SP – VC)
= 15000 / (12.50 – 8.25)
= 15000/ 4.25
= 3529.41 or rounded to 3530 units
b) Break even Revenue = Break even in units x SP
= 3530 units x $12.50
= $44125
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