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A company sells a product which has a unit sales price of $5, unit variable cost of $3 and total fixed costs of $150,000. The number of units the company must sell to break even is:___________. A. 50,000
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20 votes
A company sells a product which has a unit sales price of $5, unit variable cost of $3 and total fixed costs of $150,000. The number of units the company must sell to break even is:___________.

A. 50,000 units.
B. 300,000 units.
C. 75,000 units.
D. 30,000 units.

User Frodosamoa
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1 Answer

27 votes
27 votes

Answer:

c

Step-by-step explanation:

Breakeven quantity are the number of units produced and sold at which net income is zero

If the sales of a company exceeds the breakeven quantity, the firms is earning a profit.

If the company's sales is less than the Breakeven quantity , the firm is making losses that would not be recouped

Breakeven quantity = fixed cost / price – variable cost per unit

150,000 / (5 -3) = 75000

User Shanker
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