Question

Adams Company sells a product whose contribution margin is $10 and selling price is $25.

Answer 1

Answer:

answer is b) False

Explanation:

given data

contribution margin = $10

selling price = $25

total fixed costs = $500

break-even point  = 100 units

solution

we get here Break even point that is

Break even point = $\frac{fix\ cost}{contribution\ margin}$   ...........1

Break even point = $\frac{500}{10}$

Break even point = 50 units

but we have given break-even point is 100 units

so answer is b) False