Question

A company sells a product which has a unit sales price of $6, unit variable cost of $2 and total fixed costs of $234000. The number of units the company must sell to break even is 936000 units. 117000 units. 39000 units. 58500 units.

Answer 1

= 58,500 units

Step-by-step explanation:

The break-even sales in units is the number of units of a product to be sold in order for the total cost to be equal to the total revenue. At the break-even point total contribution is exactly equal to total fixed cost, and therefore the business makes no profit or loss.

Break-even point = Total Fixed cost/ contribution per unit

Break-even point (units) = $234,000/(6-2)

= 58,500 units

The number of units the company must sell to break even is 58,500 units