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What is the break-even point in units if fixed costs are $20,000 and contributio
What is the break-even point in units if fixed costs are $20,000 and contribution margin per unit is $5?
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Q1
What is the break-even point in units if fixed costs are $20,000 and contribution margin per unit is $5?
4,000 units
5,000 units
2,000 units
10,000 units
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Break-even point (units) = Fixed Costs / Contribution Margin per unit = $20,000 / $5 = 4,000 units.
Questions & Step-by-step Solutions
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Q
Q: What is the break-even point in units if fixed costs are $20,000 and contribution margin per unit is $5?
Solution:
Break-even point (units) = Fixed Costs / Contribution Margin per unit = $20,000 / $5 = 4,000 units.
Steps: 5
Show Steps
Step 1: Identify the fixed costs. In this case, the fixed costs are $20,000.
Step 2: Identify the contribution margin per unit. Here, the contribution margin per unit is $5.
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) = $20,000 / $5.
Step 5: Calculate the result: $20,000 divided by $5 equals 4,000 units.
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