Question

Pierce Company's break-even point is 28,000 units. Its product sells for $24 and has a $18 variable cost per unit. What is the company's total fixed cost amount?

Answer 1

Answer: The company's total fixed cost amount = $168000

Step-by-step explanation:

Given that,

Company's break-even point = 28,000 units

product sells = $24 per unit

variable cost per unit = $18

Break even point =
`(Fixed\ Cost)/(Price\ per\ unit - Variable\ cost\ per unit)`

28000 =
`(Fixed\ Cost)/(24 - 18)`

Fixed costs = 28000 × $6

= $168000 ⇒ The company's total fixed cost amount.