Question

IKEA has a breakeven volume of 100,000 units for their new AGUNNARYD lamp. The variable cost per unit is $75 and the revenue per unit is $99.99. The fixed costs are: Group of answer choices $5,000,000 $2,499,000 $2,799,000 $3,333,000

Answer 1

To determine the fixed costs for IKEA's AGUNNARYD lamp, the breakeven formula is used, revealing the fixed costs to be (Option B) $2,499,000 at a breakeven volume of 100,000 units.

Step-by-step explanation:

The student's question pertains to the calculation of fixed costs for IKEA's new AGUNNARYD lamp, given a breakeven volume of 100,000 units, a variable cost per unit of $75, and revenue per unit of $99.99. To find the fixed costs, we use the breakeven formula: (Fixed Costs + Variable Costs × Quantity) = Revenue × Quantity. Plugging in the given numbers we get: Fixed Costs + ($75 × 100,000) = $99.99 × 100,000. Solving for Fixed Costs reveals that the correct answer is (Option B) $2,499,000.