Calculate the break-even point in dollars from the following information.Selling price per unit is $50,variable costs per unit are $30 and fixed costs for the year are $25 000.
A) $62 500
B) $1 250
C) $83 333
D) $41 667

Question

Quizplus · Accepted Answer

The break-even point in dollars is calculated by dividing the total fixed costs by the contribution margin ratio. The contribution margin per unit is $50 - $30 = $20. The contribution margin ratio is $20/$50 = 0.4. The break-even point in dollars is $25,000 / 0.4 = $62,500.

Calculate the Break-Even Point in Dollars from the Following Information