Question

Kurt, an artist, plans to paint and sell some miniature paintings.

​He just bought some brushes for \$112$112 , and paint and canvas for each painting costs \$34$34 ; he will sell each painting for \$38$38.

​Once Kurt sells a certain number of his paintings, he will be breaking even.

​How much will Kurt have earned? How many paintings will that be?

Kurt’s expenses and receipts will both total $when he has sold of his paintings. Answers 1. huyenthanh a) The amount earned by Kurt by selling the break-even units of painting at$38 each is $1,064. b) The number of paintings that Kurt will be selling at the break-even point is 28. ### What is the break-even point? The Break-even point is the sales units at which the seller’s total revenue equals the total costs. At the break-even point, there is no profit or loss. ### Data and Calculations: Fixed costs =$112
Variable cost = $34 Selling price =$38
Contribution margin = $4 ($38 – $34) Contribution margin ratio = 10.53% ($4/$38 x 100) Break-even point (units) = Fixed costs/Contribution margin per unit = 28 units ($112/$4) Break-even point (dollars) =$1,064 (\$38 x 28)