If the sales price per unit is $100, the unit variable cost is $75, and total fixed costs are $150,000, then the break- even volume in dollar sales rounded to the nearest whole dollar is:
A) $600,000
B) $150,000
C) $1,500
D) $200,000

Question

Quizplus · Accepted Answer

The break-even volume in dollar sales is calculated by dividing the total fixed costs by the contribution margin ratio. The contribution margin per unit is $100 - $75 = $25. The contribution margin ratio is $25 / $100 = 0.25. The break-even point in units is $150,000 / $25 = 6,000 units. In dollar sales, it is 6,000 units * $100 = $600,000.

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