Use the information below to answer the following question(s).Franscioso Company sells several products.Information of average revenue and costs is as follows:

-The Franscioso Company break-even in units is
A)5,500 units.
B)3,502 units.
C)2,709 units.
D)6,059 units.
E)12,952 units.

Question

Use the information below to answer the following question(s).Franscioso Company sells several products.Information of average revenue and costs is as follows:
 
-The Franscioso Company break-even in units is
A)5,500 units. 
B)3,502 units. 
C)2,709 units. 
D)6,059 units. 
E)12,952 units.

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing the fixed costs by the contribution margin per unit. The contribution margin per unit is calculated by subtracting the variable cost per unit from the selling price per unit. In this case, the fixed costs are $100,000, the selling price per unit is $20, and the variable cost per unit is $10. Therefore, the contribution margin per unit is $10, and the break-even point in units is 100,000 / 10 = 10,000 units.

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