Question

Your break-even point is 3,000 units. You make $5 on each unit; that is, your price minus variable cost is $5. What are your fixed costs? Use the formula: Break-even Point = Fixed Costs / (Price - Variable Cost)

Answer 1

The fixed cost is $15000

Step-by-step explanation:

Given:

Break even point = 3000 units

Each unit = $5 → (Price - variable cost = $5)

Fixed cost, x = ?

We know,

Break even point = fixed cost / (Price - Variable cost)

On substituting the values:

`3000 = (x)/(5) \\\\x = 15000`

Thus, the fixed cost is $15000