Figure 4-3.Paney Company makes calendars. Information on cost per unit is as follows:
Fixed marketing expense totaled $13,000 and fixed administrative expense totaled $35,000. The price per calendar is $10.
-Refer to Figure 4-3. What is the break-even point in units?

Question

Figure 4-3.Paney Company makes calendars. Information on cost per unit is as follows:
  Fixed marketing expense totaled $13,000 and fixed administrative expense totaled $35,000. The price per calendar is $10.
-Refer to Figure 4-3. What is the break-even point in units?

Quizplus · Accepted Answer

To calculate the break-even point in units, we need to use the formula: 
Break-even point (units) = Fixed Costs / (Price per unit - Variable Costs per unit)

Fixed Costs = $13,000 + $35,000 = $48,000
Variable Costs per unit = $3 + $2 + $1 = $6
Price per unit = $10

Therefore, Break-even point (units) = $48,000 / ($10 - $6) = 8,000 units.

The best choice is C.