If fixed costs are $100,000, variable cost per unit is $40, and the selling price is $60, how many units must be sold for the fi

Question

Travka [436]

2 years ago

9

If fixed costs are $100,000, variable cost per unit is $40, and the selling price is $60, how many units must be sold for the fi

rm to break even? 5,000 2,500 1,000 10,000

Business

1 answer:

Margarita [4] · Answer 1 · 2022-05-14T03:48:25+03:00

In order to break even, they would need to sell at least 5,000 units

Break even point is calculated by the formula:

Fixed costs÷(selling price -variable costs per unit)

i.e.

100,000 ÷ (60-40) = 5,000

Anything they sell above this number will start to produce profits for the company