Question

RUSH

The unit selling price of a product is $150, the unit variable cost is $90, and the total fixed costs are $50,000. Break-even sales (in units) are

334

556

834

209

Answer 1

Correct answer is 834 units.
We know that
Break even Sales (in units) = Fixed cost / Contribution per unit

Fixed Cost= $ 50,000

Contribution per unit = Selling price per unit - Variable cost per unit
= $ 150 - $ 90
= $ 60

Break even sales (in units) = $ 50,000 / $60 = $ 834 units.

Note: Break even sales in units is that level of sales at which there is not profit no loss. After break even point the firms realizes profits and before break even point firm incurs loses.