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What is the break-even point in units if fixed costs are $12,000 and the contrib
What is the break-even point in units if fixed costs are $12,000 and the contribution margin per unit is $40?
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What is the break-even point in units if fixed costs are $12,000 and the contribution margin per unit is $40?
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Break-even point (units) = Fixed costs / Contribution margin per unit = $12,000 / $40 = 300 units.
Questions & Step-by-step Solutions
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Q
Q: What is the break-even point in units if fixed costs are $12,000 and the contribution margin per unit is $40?
Solution:
Break-even point (units) = Fixed costs / Contribution margin per unit = $12,000 / $40 = 300 units.
Steps: 6
Show Steps
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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