A product is currently made in a process-focused shop, where fixed costs are $9,000 per year and variable cost is $50 per unit. The firm sells the product for $200 per unit. What is the break-even point for this operation? What is the profit (or loss) on a demand of 200 units per year?

Break-Even Point

The point at which total costs and total revenue are equal, meaning no net loss or gain is incurred; a critical measure of financial viability for a product or business.

Variable Cost

Costs that change in proportion to the level of production or sales volume, such as raw materials and direct labor.