If unit variable costs for a product is $12, the selling price of the product is $20, and the fixed costs are $64,000. How many units must be sold for the firm to earn $16,000 in profit in addition to covering its fixed costs?
A) 2,000
B) 6,000
C) 8,000
D) 10,000

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Quizplus · Accepted Answer

If unit variable costs for a product is $12, the selling price of the product is $20, and the fixed costs are $64,000. To earn $16,000 in profit in addition to covering its fixed costs, the company needs to sell at least 10,000 units.Profit margin is $8 (20-12). Fixed costs plus profit margin is $80,000 (64,000 + 16,000). Breakeven is 80,000 divided by 8.

If Unit Variable Costs for a Product Is $12, the Selling