Question

A company has fixed costs of $50,000 while manufacturing a product that has variable costs of $4 per unit and sells for $14 per unit. The break-even point is:_____

Answer 1

the break even point in units is 5,000 units

Step-by-step explanation:

The computation of the break even point in units is shown below:

= Fixed cost ÷ contribution margin per unit

= Fixed cost ÷ (Selling price per unit - variable cost per unit)

= $50,000 ÷ ($14 - $4)

= $50,000 ÷ $10

= 5,000 units

hence, the break even point in units is 5,000 units

We simply applied the above formula so that the correct value could come

And, the same is to be considered