If a firm has fixed costs of $30,000,a price of $4.00,and a break-even point of 15,000 units,the variable cost per unit is:
A) $5.00.
B) $2.00.
C) $0.50.
D) $4.00.

Question

Quizplus · Accepted Answer

The formula for break-even point is:
Break-even point = Fixed Costs ÷ (Price - Variable Cost per unit)

Substituting the given values:
15,000 = 30,000 ÷ (4 - Variable Cost per unit)
Variable Cost per unit = (4-15,000/30,000)
Variable Cost per unit = $2.00.

Therefore, the best choice is B.

If a Firm Has Fixed Costs of $30,000,a Price of $4.00,and