Question

A recent income statement of Suni Corporation reported the following data:

Sales Revenue$6,800,000Variable Cost$2,800,000Fixed Cost$2,500,000
If these data are based on the sale of 20,000 units, the break-even point would be:
A.11,628 units
B.7,500 units
C.33,333 units
D.None of the other answers is correct
E.12,500 units

Answer 1

E. 12,500 units

Step-by-step explanation:

Contribution margin = Sales - Variable cost = $6800000 - $2800000 = 40,00,000

Contribution margin per unit = 4000000/20000 = $200 per unit

Break-even Point = Fixed cost/Contribution margin per unit = $2500000/$200 = 12500 units