Question

If fixed costs are $200,000 and the unit contribution margin is $20, what amount of units must be sold in order to have a zero profit

Answer 1

Answer:

the amount of units that should be sold in the case when there is a zero profit is 10,000 units

Explanation:

The computation of the amount of units that should be sold in the case when there is a zero profit is given below:

No. of units to be sold is

= Fixed Cost ÷ Contribution per unit

= $200,000 ÷ $20

= 10,000 units.

hence, the amount of units that should be sold in the case when there is a zero profit is 10,000 units