Question

If the sales price is $150 per unit, the variable cost is $90 per unit, and total fixed costs is $24,000, the breakeven in sales dollars is:

a) $24,000.
b) $36,000.
c) $60,000
d) $15,000.

Answer 1

The breakeven in sales dollars is $60,000 which is calculated by dividing the total fixed costs by the difference between the sales price per unit and the variable cost per unit, and then multiplying the result by the sales price per unit. Hence, the correct answer is option (c).

Step-by-step explanation:

If the sales price is $150 per unit, the variable cost is $90 per unit, and total fixed costs is $24,000, the breakeven in sales dollars can be calculated using the formula given:

Breakeven in units = Total fixed costs / (Sales price per unit - Variable cost per unit)

Breakeven in units = $24,000 / ($150 - $90) = $24,000 / $60 = 400 units

To find the breakeven in sales dollars, we multiply the breakeven in units by the sales price per unit:

Breakeven in sales dollars = Breakeven in units * Sales price per unit

Breakeven in sales dollars = 400 units * $150/unit = $60,000

Therefore, the correct answer is c) $60,000.