If the product price is $100, average variable cost $40 per unit, and the total fixed costs are $120,000, what is the breakeven point?
A) 500 units
B) 2,000 units
C) 1,200 units
D) 300 units
E) 3,000 units

Question

Quizplus · Accepted Answer

The breakeven point in units can be calculated using the formula: Breakeven Point = Total Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). Plugging in the given values: $120,000 / ($100 - $40) = $120,000 / $60 = 2,000 units.

If the Product Price Is $100, Average Variable Cost $40