A pottery manufacturer is conducting a breakeven analysis. Its line of strawberry pots has $18,000 in fixed costs. The fixed-cost contribution is $3. The pottery manufacturer must sell which of the following number of units to break event?
A) 1,000
B) 3,000
C) 6,000
D) 10,000

Question

Quizplus · Accepted Answer

To break even, the manufacturer needs to cover the fixed costs with the contribution per unit. The break-even point in units is calculated as Fixed Costs / Contribution per Unit = $18,000 / $3 = 6,000 units.

A Pottery Manufacturer Is Conducting a Breakeven Analysis