Answer the following questions using the information below:
Koscuiszko Chalet,Inc.sells burgers during the major ski season.During the current year 11 000 burgers were sold resulting in $220 000 of sales revenue,$55 000 of variable costs,and $24 000 of fixed costs.
-Break-even point in units is:
A)1000 burgers.
B)1200 burgers.
C)1600 burgers.
D)None of these answers are correct.

Question

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing the total fixed costs by the contribution margin per unit. The contribution margin per unit is the selling price per unit minus the variable cost per unit. Here, the selling price per burger is $220,000 / 11,000 = $20, and the variable cost per burger is $55,000 / 11,000 = $5. Therefore, the contribution margin per burger is $20 - $5 = $15. The break-even point is $24,000 / $15 = 1,600 burgers.

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