Longstreet Inc.has fixed operating costs of $470,000,variable costs of $2.80 per unit produced,and its product sells for $4.00 per unit.What is the company's break-even point,i.e.,at what unit sales volume would income equal costs?
A)391,667
B)411,250
C)431,813
D)453,403
E)476,073

Question

Quizplus · Accepted Answer

The break-even point is calculated by dividing the fixed costs by the difference between the selling price per unit and the variable cost per unit. Here, it is $470,000 / ($4.00 - $2.80) = 391,667 units.