Jenkins Corporation sells one product. The following information is available for the current month:

What is the variable costing breakeven point in units? (Round your final answer up to the next whole unit.)
A) 6,930 units
B) 7,796 units
C) 7,157 units
D) 7,374 units

Question

Jenkins Corporation sells one product. The following information is available for the current month:

What is the variable costing breakeven point in units? (Round your final answer up to the next whole unit.)
A) 6,930 units 
B) 7,796 units 
C) 7,157 units 
D) 7,374 units

Quizplus · Accepted Answer

Standard fixed manufacturing cost is $49 and hence the total fixed manufacturing cost is $686,000 ($49 × 14,000 units). Fixed selling and administrative overhead is $44,000. Therefore, the total fixed expense is $730,000 ($686,000 + $44,000). The contribution per unit is $99 ($110 - $8 - $3). Therefore, the breakeven point in units is 7,374 units ($730,000 / $99).

Jenkins Corporation Sells One Product