The Foggy Futures Weather Network offers an annual almanac for sale each year with information about predicted weather patterns, severe storm safety tips, and a tracking chart. The finished product sells for $35, with a variable cost per unit of $21. The company has operating costs of $1,050,000. The company has operating costs of $1,050,000. What is the firm's breakeven point in dollars?
A) $1,750,000
B) $4,670,000
C) $2,625,000
D) $3,875,566

Question

Quizplus · Accepted Answer

The breakeven point in units can be calculated as follows:
Breakeven point (units) = Fixed costs / (Price per unit - Variable cost per unit)
Price per unit = $35
Variable cost per unit = $21
Fixed costs = $1,050,000

Breakeven point (units) = $1,050,000 / ($35 - $21) = 75,000 units

To calculate the breakeven point in dollars, we multiply the breakeven point in units by the price per unit:
Breakeven point (dollars) = 75,000 x $35 = $2,625,000

Therefore, the best choice is C.

The Foggy Futures Weather Network Offers an Annual Almanac for Sale