If the sales price per unit is $17.00, the unit variable cost is $13.50, and the break-even point is 78,000 units, then the total fixed costs are
A) $105,300.
B) $89,140.
C) $273,000.
D) $156,000.

Question

Quizplus · Accepted Answer

The break-even point formula is:

Break-even point = Total fixed costs / (Sales price per unit - Unit variable cost)

Plugging in the given values, we get:

78,000 = Total fixed costs / (17.00 - 13.50)

Simplifying the right side, we get:

78,000 = Total fixed costs / 3.50

Multiplying both sides by 3.50, we get:

Total fixed costs = 78,000 x 3.50 = $273,000

Therefore, the total fixed costs are $273,000, which corresponds to answer choice C.

If the Sales Price Per Unit Is $17