Question

Dartmouth Company produces a single product with a price of $11, variable cost per unit of $2, and total fixed cost of $8,500. Dartmouth's break-even point in units (round your answer to the nearest whole number)

a.is 933.
b.is 944.
c.is 955.
d.is 966.

Answer 1

b.is 944.

Step-by-step explanation:

The computation of the break-even point in units is shown below:

Break-even point in units = (Fixed cost) ÷ (contribution margin per unit)

where,

Contribution margin per unit = Selling price per unit - variable cost per unit

= $11 - $2

= $9

And, the fixed expense is $8,500

Now put these values to the above formula

So, the units would be

= $8,500 ÷ $9 per units

= 944.45 units