Answer:
The break even point in units is 24000 rooms per year.
Explanation:
The break even point in units is a point where enough units are sold to earn a revenue that covers the total cost of the business and there is neither a profit nor a loss to the business. The break even point in units can be calculated as follows,
Break even in units = Fixed cost / Contribution margin per unit
Where,
Contribution margin per unit = Selling price per unit - Variable cost per unit
So,
Contribution margin per unit = 90 - 40 = $50
Break even in units = 1200000 / 50 = 24000 units
The answer is B. Interest
Answer:
D. Contribution margin would be equal to total fixed costs
Explanation:
As we know that
break even point is the point at which the firm is earning no profit or no loss suffered
In equation, it is
Total cost = Total revenues
In addition,
The contribution margin = Sales - variable expenses
Therefore
The contribution margin = Fixed cost = break even point
If we subtract the contribution margin from the fixed cost the amount should be zero which implies the break even point
