Variable cost for Light.com's fluorescent tubes is $12.50, and the tubes are sold over the internet to businesses and organizations for $20.00 each.Fixed costs are $7,500,000.What is the break-even quantity for the fluorescent tubes?
A)600,000
B)1,000,000
C)375,000
D)7,500,000

Question

Quizplus · Accepted Answer

The break-even quantity is calculated by dividing the fixed costs by the contribution margin per unit (selling price - variable cost). Here, it is $7,500,000 / ($20.00 - $12.50) = 1,000,000 units.

Variable Cost for Light