Question

Moyas Corporation sells a single product for $20 per unit. Last year, the company's sales revenue was $300,000 and its net operating income was $24,000. If fixed expenses totaled $96,000 for the year, the break-even point in unit sales was: Multiple Choice 12,000 units 9,900 units 15,000 units 14,100 units

Answer 1

Answer:

Break-even point in units= 12,000

Explanation:

Giving the following information:

Selling price= $20 per unit

Fixed expenses= $96,000

Last year, the company's sales revenue was $300,000, and its net operating income was $24,000.

First, we need to calculate the unitary variable cost:

Units sold= 300,000/20= 15,000

Total variable cost= 300,000 - 24,000 - 96,000

Total variable cost= 180,000

unitary variable cost= 180,000/15,000= $12

To calculate the break-even point in units, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 96,000 / (20 - 12)

Break-even point in units= 12,000