If fixed costs are $24,000,variable costs are $25 per unit,and the product sells for $45,the total contribution margin at the breakeven point is $24,000.

Question

Quizplus · Accepted Answer

The breakeven point is when total revenue equals total cost, or in other words, when there is no profit or loss. To calculate the breakeven point, we need to use the formula:

Breakeven point (in units) = Fixed costs / Contribution margin per unit

Contribution margin per unit = Sale price per unit - Variable cost per unit
Contribution margin per unit = $45 - $25 = $20

Breakeven point (in units) = $24,000 / $20 = 1,200 units

To calculate the total contribution margin at the breakeven point, we need to multiply the contribution margin per unit by the number of units sold at the breakeven point:

Total contribution margin at breakeven point = Breakeven point (in units) x Contribution margin per unit
Total contribution margin at breakeven point = 1,200 units x $20 = $24,000

Therefore, the statement "the total contribution margin at the breakeven point is $24,000" is true.

If Fixed Costs Are $24,000,variable Costs Are $25 Per Unit,and