Besser Ltd's contribution margin per unit is $2 and the break-even number of units is 2000.If Besser Ltd sell 5000 units their profit will be:
A) $2000
B) $6000
C) $10 000
D) $4 000

Question

Quizplus · Accepted Answer

The profit is calculated by multiplying the contribution margin per unit by the number of units sold beyond the break-even point. Selling 5000 units means 3000 units beyond break-even (5000 - 2000). Thus, profit = 3000 units * $2 = $6000.

Besser Ltd's Contribution Margin Per Unit Is $2 and the Break-Even