In 2014,a small publishing company sold 60,000 copies of Super Travel paperbacks (its only product)at $5 per book;total fixed costs were $15,000;and total variable costs were $3 per book.What is this company's breakeven point in units?

Question

Quizplus · Accepted Answer

The breakeven point is the level of sales at which a company neither earns a profit nor incurs a loss. To find the breakeven point, we need to determine the number of units the company must sell to cover its fixed and variable costs.

Let x be the number of units sold. Then, the total cost (TC) can be expressed as:

TC = Fixed costs + Variable costs
TC = $15,000 + ($3 × x)

The total revenue (TR) can be expressed as:

TR = Price per unit × Number of units sold
TR = $5 × x

At the breakeven point, TR = TC. Therefore,

$5x = $15,000 + ($3 × x)

Solving for x, we get:

$2x = $15,000
x = 7,500

Therefore, the breakeven point in units is 7,500. The best choice is B.

In 2014,a Small Publishing Company Sold 60,000 Copies of Super