Answer the following questions using the information below:
Holly's Ham, Inc. sells hams during the major holiday seasons. During the current year 11,000 hams were sold resulting in $220,000 of sales revenue, $55,000 of variable costs, and $24,000 of fixed costs.
-Breakeven point in units is:
A)1,000 hams
B)1,200 hams
C)1,600 hams
D)None of these answers are correct.

Question

Quizplus · Accepted Answer

To find the breakeven point in units, we need to use the formula:

Breakeven point (units) = Fixed costs / (Unit price - Variable cost per unit)

In this case, the unit price can be calculated by dividing the sales revenue by the number of hams sold:

Unit price = Sales revenue / Number of hams sold 
Unit price = $220,000 / 11,000 hams 
Unit price = $20

Plugging in the values:

Breakeven point (units) = $24,000 / ($20 - $5) 
Breakeven point (units) = $24,000 / $15 
Breakeven point (units) = 1,600 hams

Therefore, the correct answer is C.

Answer the Following Questions Using the Information Below