Queen,Ltd.has one product.Its sales price and variable cost per unit are $25 and $20,respectively.Last year,Queen sold 25,000 units,which was 5,000 more than the break-even point.What were Queen's fixed expenses?
A)$100,000
B)$125,000
C)$300,000
D)There is not enough information to answer the question.

Question

Quizplus · Accepted Answer

Fixed expenses can be calculated using the formula: Fixed Expenses = (Sales Price per Unit - Variable Cost per Unit) * Break-even Quantity. Given that the break-even point was 5,000 units less than 25,000 units sold, it was 20,000 units. Therefore, Fixed Expenses = ($25 - $20) * 20,000 = $5 * 20,000 = $100,000.

Queen,LtdHas One Product