Answer the following questions using the information below:
Martha Manufacturing produces a single product that sells for $80. Variable costs per unit equal $32. The company expects total fixed costs to be $72,000 for the next month at the projected sales level of 2,000 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately.
-What is the current breakeven point in terms of number of units?
A)1,500 units
B)2,250 units
C)3,333 units
D)None of these answers are correct.

Question

Quizplus · Accepted Answer

To calculate the breakeven point, we use the formula: BEP = Fixed Costs / (Price - Variable Costs) = $72,000 / ($80 - $32) = 1,500 units. Therefore, the current breakeven point is 1,500 units.

As no alternatives are given, there is no best choice to evaluate.

Answer the Following Questions Using the Information Below