Man with out stretched hand holding pills (a) Total Break-Even Unit Volume (TBEV)

Pharmalodiagnosticon, an up and coming pharmaceutical company, is thinking of introducing a new product, Sweet Relief, into the crowded OTC market for pain relievers. Its set to be sold to retailers for about seven dollars for a bottle of 250 caplets. It will cost Pharmalodiagnosticon $2 dollars to produce each bottle of pills. In addition to this, Pharmalodiagnosticon plans to spend $3,900,000 in marketing the new drug. Their other fixed costs were an extra $1,100,000 besides marketing.

Average Unit Contribution = $7 - $2 = $5

TBEV = $5,000,000/$5 = 1,000,000 units