Final answer:
The break-even volume at a price of $9/unit, with production costs of $5/unit and fixed costs of $400,000, is calculated using the formula: Fixed Costs ÷ (Price per Unit - Variable Cost per Unit), which results in 100,000 units.
Step-by-step explanation:
The subject of this question is Business, specifically the break-even analysis used in financial management and accounting. The question is suitable for a College level course that deals with such analyses in a business or economics curriculum.
To find the break-even volume at a price of $9/unit, where the costs of production are $5/unit and fixed costs are $400,000, we apply the break-even formula:
Break-Even Point (Units) = Fixed Costs ÷ (Price per Unit - Variable Cost per Unit)
Plugging in the given numbers:
Break-Even Point (Units) = $400,000 ÷ ($9/unit - $5/unit)
Break-Even Point (Units) = $400,000 ÷ $4/unit
Break-Even Point (Units) = 100,000 units
Therefore, the company must sell 100,000 units at a price of $9 per unit to cover all of its costs and begin making a profit.