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Question

Toby’s Tiny Toys have fixed expenses of $53,900 for the production of their tiny toys. Toby’s has a variable expense of $12.50 a piece for each toy they produce, and they sell their toys for $16.50 a piece. How many tiny toys do they have to sell to reach their breakeven point?

Answer

Ok class, let's discuss the break-even point for Toby's Tiny Toys. This is the point at which they neither make a profit nor suffer a loss. They must sell enough of their toys to cover their fixed and variable costs. Based on our calculations, Toby's Tiny Toys needs to sell 13,475 units to reach this point. Each unit is sold for $16.50 and has variable expenses of $12.50, resulting in a contribution margin of $4 per unit. The fixed expenses for the company are $53,900. To calculate the break-even point, we divide the fixed expenses by the contribution margin per unit, which gives us the number of units the company needs to sell to cover their costs. So to summarize, Toby's Tiny Toys needs to sell 13,475 units to break even. If you want to learn more about break-even points, check out brainly.com/question/15281855 #SPJ1.