A firm's fixed costs are $50,000 and its unit variable cost is $15.00. At a selling price of $25.00 per unit, the breakeven point is
A) 50,000 units.
B) 125,000 units.
C) 5,000 units.
D) 100,000 units.
E) 75,000 units.

Question

Quizplus · Accepted Answer

The breakeven point in units is calculated by dividing the fixed costs by the contribution margin per unit (selling price - variable cost). Here, it is $50,000 / ($25 - $15) = 5,000 units.

A Firm's Fixed Costs Are $50,000 and Its Unit Variable