What is the break-even point in units if fixed costs are $12,000 and the contrib

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Question: What is the break-even point in units if fixed costs are $12,000 and the contribution margin per unit is $40?

Options:

Correct Answer: 400 units

Solution:

Break-even point (units) = Fixed costs / Contribution margin per unit = $12,000 / $40 = 300 units.

What is the break-even point in units if fixed costs are $12,000 and the contribution margin per unit is $40?

What is the break-even point in units if fixed costs are $12,000 and the contribution margin per unit is $40?

Step 1: Identify the fixed costs. In this case, the fixed costs are $12,000.
Step 2: Identify the contribution margin per unit. Here, the contribution margin per unit is $40.
Step 3: Use the break-even point formula: Break-even point (units) = Fixed costs / Contribution margin per unit.
Step 4: Plug in the numbers: Break-even point (units) = $12,000 / $40.
Step 5: Calculate the result: $12,000 divided by $40 equals 300 units.
Step 6: Conclude that the break-even point is 300 units.

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