If the sales price per unit is $100, the total fixed costs are $75,000, and the break?even volume in dollar sales is $250,000, then the variable cost per unit is _____.
A)$70
B)$100
C)$75,000
D)$30

Question

Quizplus · Accepted Answer

The break-even point in units can be calculated by dividing the total fixed costs by the contribution margin per unit (sales price per unit - variable cost per unit). Given the break-even dollar sales of $250,000 and a sales price per unit of $100, the break-even volume in units is $250,000 / $100 = 2,500 units. To find the variable cost per unit, we rearrange the break-even formula: $75,000 / 2,500 units = $30 contribution margin per unit. Therefore, the variable cost per unit is $100 - $30 = $70.

If the Sales Price Per Unit Is $100, the Total