HugME Company produces dolls.Each doll sells for $20.00.Variable costs are $14.00 per unit.If the break-even volume in dollars is $1,446,000,then the total fixed costs for the period are ________.
A)$361,500
B)$433,800
C)$516,425
D)$1,446,000

Question

Quizplus · Accepted Answer

The break-even point in dollars is calculated as Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). Here, the contribution margin per unit is $20 - $14 = $6. Therefore, Fixed Costs = $1,446,000 * ($6 / $20) = $433,800.

HugME Company Produces Dolls