Assume the sales price is $100 per unit and the total fixed costs are $75,000.The break-even volume in dollar sales is $250,000.What is the variable cost per unit?
A) $30
B) $70
C) $100
D) $125

Question

Quizplus · Accepted Answer

To find the variable cost per unit, use the break-even formula: Break-even sales = Fixed Costs / (1 - (Variable Cost per Unit / Sales Price)). Plugging in the values: $250,000 = $75,000 / (1 - (VC / $100)). Solving for VC gives $70.

Assume the Sales Price Is $100 Per Unit and the Total