Break even

MyWare is a computer software retailer located in Portland. Its product is a state-of-the-art software package, with a $300 selling price. The fixed operating costs are $40,000 per period. The variable cost per software package is $100. Use a computer spreadsheet. Assume independent situations.

Required:

A. How many software packages must be sold to break even?

B. How many software packages must be sold to earn $3,000 per period before taxes?

C. How many software packages must be sold to earn $3,000 per period after taxes of 40 percent?

D. If fixed costs increase by 10 percent, how many software packages must be sold to break even?

E. If variable costs increase by 15 percent, how many software packages must be sold to break even?

F. If the selling price decreases by 5 percent, how many software packages must be sold to break even?

Solution: