To calculate the break-even point, we need to find out how many computers the company needs to sell to cover its total costs.
Total cost = Fixed cost + Variable cost
Total cost = 5,000,000 + 6,000,000 = 11,000,000
Revenue = Number of computers x Selling price
We know the company plans to sell 30,000 computers for birr 700 each, so:
Revenue = 30,000 x 700 = 21,000,000
To break even, Revenue = Total cost
30,000 x 700 = 11,000,000
30,000 = 11,000,000 / 700
30,000 = 15,714.29
Therefore, the company needs to sell around 15,714 computers to break even.
