Question

Assume a sales price per unit of $10, variable cost per unit $6, and total fixed costs of $184800. What is the breakeven point in units

Answer 1

Answer:

The correct solution is "$462000".

Explanation:

The given values are:

Selling price per unit,

= $10

Variable cost per unit,

= $6

Now,

The contribution margin ratio will be:

= $\frac{Selling \ price \ per \ unit-Variable \ cost \ oer \ unit}{Selling \ price \ per \ unit}$

By putting the values, we get

= $\frac{10-6}{10}$

= $\frac{4}{10}$

= $0.4$

hence,

The break-even point will be:

= $\frac{Fixed \ costs}{Contribution \ mar gin \ ratio}$

= $\frac{184800}{0.4}$

= $462000$ ($)