At a break-even point of 400 units, variable costs were $400 and fixed costs were $200. What will the 401st unit sold contribute to operating profits before income taxes?
A) $0.50
B) $1.00
C) $1.50
D) $2.00

Question

Quizplus · Accepted Answer

The 401st unit sold will contribute $1 to operating profits before income taxes. This is because the variable cost per unit is $1, and the fixed costs are already covered at the break-even point.

At a Break-Even Point of 400 Units, Variable Costs Were