Answer the following questions using the information below:
Bush Manufacturing produces a single product that sells for $100. Variable costs per unit equal $25. The company expects total fixed costs to be $60,000 for the next month at the projected sales level of 1,000 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately.
-What is the current breakeven point in terms of number of units?
A)800 units
B)900 units
C)2,400 units
D)None of these answers are correct.

Question

Quizplus · Accepted Answer

To calculate the breakeven point, we use the formula: 
Breakeven point (units) = Total fixed costs / Contribution margin per unit 
Contribution margin per unit = Selling price per unit – Variable cost per unit 
Contribution margin per unit = $100 - $25 = $75 
Breakeven point (units) = $60,000 / $75 = 800 units

Answer the Following Questions Using the Information Below