# Solution: What is the manufacturer’s break-even sales volume in drums per year?

Steel drum manufacturer incurs a yearly fixed operating cost of \$200,000. Each drum manufactured cost \$160 to produce and sells \$200. What is the manufacturer’s break-even sales volume in drums per year?

#### Problem Statement: ME Board April 1996

Steel drum manufacturer incurs a yearly fixed operating cost of \$200,000. Each drum manufactured cost \$160 to produce and sells \$200. What is the manufacturer’s break-even sales volume in drums per year?

• A.1250
• B. 2500
• C. 5000
• D. 1000

The manufacturer’s break-even sales volume in drums per year is 5000 units.

Solution:

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