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What is the break-even point in units if fixed costs are $10,000 and the contrib

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Question: What is the break-even point in units if fixed costs are $10,000 and the contribution margin per unit is $25?

Options:

  1. 400 units
  2. 500 units
  3. 600 units
  4. 300 units

Correct Answer: 500 units

Solution: 

Break-even point (units) = Fixed costs / Contribution margin per unit = $10,000 / $25 = 400 units.

What is the break-even point in units if fixed costs are $10,000 and the contrib

Practice Questions

Q1
What is the break-even point in units if fixed costs are $10,000 and the contribution margin per unit is $25?
  1. 400 units
  2. 500 units
  3. 600 units
  4. 300 units

Questions & Step-by-Step Solutions

What is the break-even point in units if fixed costs are $10,000 and the contribution margin per unit is $25?
  • Step 1: Identify the fixed costs. In this case, the fixed costs are $10,000.
  • Step 2: Identify the contribution margin per unit. Here, the contribution margin per unit is $25.
  • Step 3: Use the break-even point formula: Break-even point (units) = Fixed costs / Contribution margin per unit.
  • Step 4: Plug in the values: Break-even point (units) = $10,000 / $25.
  • Step 5: Calculate the result: $10,000 divided by $25 equals 400 units.
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