Answer:
1.25 per unit
Explanation:
Number of units to sell = 100,000
Price per unit = 2
Fixed expense = 75000
At break even point :
Revenue = total expenses
Total expenses = fixed cost + variable cost
Let variable cost = x
Revenue = units to sell * price per unit
Revenue = 100,000 * 2 = 200,000
Hence,
Fixed cost + variable cost = Revenue
75000 + x = 200,000
x = 200, 000 - 75000
x = 125,000
Variable cost = 125,000
The variable expense per unit is thus :
Variable expense / number of units
125,000 / 100,000 = 1.25 per unit
