If a firm has a sales price per unit of $6.00, a variable cost per unit of $4.00, and a break-even point of 40,000 units, fixed costs are equal to ________.
A) $27,000
B) $90,000
C) $80,000
D) $50,000

Question

Quizplus · Accepted Answer

Fixed costs can be calculated using the formula: Fixed Costs = (Sales Price per Unit - Variable Cost per Unit) * Break-Even Point. Plugging in the given values: Fixed Costs = ($6.00 - $4.00) * 40,000 = $2.00 * 40,000 = $80,000.

If a Firm Has a Sales Price Per Unit of $6.00