Question

Assume a sales price per unit of $10, variable cost per unit $6, and total fixed costs of $184800. What is the breakeven point in units

Answer 1

The correct solution is "$462000".

Step-by-step explanation:

The given values are:

Selling price per unit,

= $10

Variable cost per unit,

= $6

Now,

The contribution margin ratio will be:

=
`(Selling \ price \ per \ unit-Variable \ cost \ oer \ unit)/(Selling \ price \ per \ unit)`

By putting the values, we get

=
`(10-6)/(10)`

=
`(4)/(10)`

=
`0.4`

hence,

The break-even point will be:

=
`(Fixed \ costs)/(Contribution \ mar gin \ ratio)`

=
`(184800)/(0.4)`

=
`462000` ($)