Currently, fixed costs are $540,000, the unit selling price is $95, and the unit variable cost is $60.What would be the break-even sales (in units), if the unit selling price is increased by $10?
A) 5,294 units
B) 9,000 units
C) 12,857 units
D) 12,000 units

Question

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing the fixed costs by the contribution margin per unit. With the increased selling price of $105 ($95 + $10), the contribution margin per unit is $45 ($105 - $60). Thus, the break-even sales in units is $540,000 / $45 = 12,000 units.

Currently, Fixed Costs Are $540,000, the Unit Selling Price Is