Answer the following questions using the information below:
Franscioso Company sells several products. Information of average revenue and costs is as follows:

-The number of units that Franscioso must sell each year to break even is:
A)1,000 units
B)4,000 units
C)5,500 units
D)indeterminable

Question

Answer the following questions using the information below:
Franscioso Company sells several products. Information of average revenue and costs is as follows:
 
-The number of units that Franscioso must sell each year to break even is:
A)1,000 units 
B)4,000 units 
C)5,500 units 
D)indeterminable

Quizplus · Accepted Answer

To calculate the break-even point, we need to find the point where total revenue equals total cost or when profit is zero. 
The formula for break-even point is:
Break-even point = Fixed costs / (Revenue per unit - Variable cost per unit)
Using the information given in the table, we can calculate the break-even point:
Break-even point = 35,000 / (16 - 9) = 5,500 units
Therefore, the best choice is C, as Franscioso must sell 5,500 units each year to break even.

Answer the Following Questions Using the Information Below