Starlight Co. makes and sells only one product. The unit contribution margin is $6 and the break-even point in unit sales is 24,000. The company's fixed costs are:
A) $4,000.
B) $14,400.
C) $40,000.
D) $144,000.
E) None of the answers is correct.

Question

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing the total fixed costs by the unit contribution margin. Therefore, fixed costs = 24,000 units * $6 = $144,000.