to get to the break-even point in units I have used the formula Revenue = cost. QTY x selling price = (variable cost x qty) +FC. With this formula, I'll get 34 units that they must produce in order to become profitable. But solution indicates 9 units. can someone please explain that to me.
Thanks
Hi Maximilian,
If it helps, your formula is correct.
Where the mistake appears is unclear to me. There might also just be an issue with the case.
What would matter in a real life scenario is that you align the formula with the interviewer (i.e., the approach for solving the problem) and then go ahead with the computations step by step so they follow what you are doing.
Also, if you are looking into other common formulas and terms for interviews, the following resource might be useful:
Good luck!
Cristian
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Hey Maximilian,
Just to add to Cristian's answer, make sure you're learning how to apply breakeven. As breakeven can apply to many different formulas (solving for years, age, price, quantity, etc.)
Case von
