Compute break-even sales (in units) when fixed costs are $420,000, unit selling price is $66, and unit variable cost is $42.
A) 17,500 units
B) 10,500 units
C) 11,500 units
D) 20,300 units

Question

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing the fixed costs by the contribution margin per unit (selling price - variable cost). Here, it is $420,000 / ($66 - $42) = 17,500 units.

Compute Break-Even Sales (In Units) When Fixed Costs Are $420,000