The owner of Clock Winds incurs a fixed cost of $20,000 for equipment, taxes, and its bank loan.The unit variable cost for labour, materials, and promotional costs is $20.If the price charged for each clock is $40, what is the break-even point quantity?
A)800
B)1,500
C)1,000
D)1,200

Question

Quizplus · Accepted Answer

The break-even point is calculated as fixed costs divided by unit price minus unit variable costs, or $20,000 F1F1F1S1F1F1F10 ($40 - $20), which equals 1,000 clocks.

The Owner of Clock Winds Incurs a Fixed Cost of $20,000