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alexira [117]
2 years ago
10

LO 3.2If a company has fixed costs of $6,000 per month and their product that sells for $200 has a contribution margin ratio of

30%, how many units must they sell in order to break even?
100
180
200
2,000
Business
1 answer:
Oliga [24]2 years ago
4 0

Answer:

Correct answer is 100 units

Explanation:

Break-even in unit formula is unit contribution margin divided by total fixed cost. To illustrate further, computation is as follows:

<em>Step 1. Compute the unit contribution margin. We have to multiply unit sales price to the contribution margin ratio given to get it.</em>

unit sales price  $200 x 20% = $60

Step 2. Compute the Break-even in units by dividing total fixed cost by the unit contribution margin.

BEP = total fixed cost / unit contribution margin

BEP = $6,000 / $60

BEP = 100 units

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