A company's selling price is $12 per unit,variable cost is $3 per unit,and fixed costs are $25,000.What is the break-even point in sales dollars?
A)$53,333
B)$44,444
C)$33,333
D)$ 1,333

Question

Quizplus · Accepted Answer

Break-even point (in units) = Fixed Costs / (Selling Price per unit - Variable Cost per unit)
Break-even point (in units) = $25,000 / ($12 - $3)
Break-even point (in units) = 2,500 units
Break-even point (in sales dollars) = Break-even point (in units) * Selling Price per unit
Break-even point (in sales dollars) = 2,500 * $12
Break-even point (in sales dollars) = $30,000
Therefore, the break-even point in sales dollars is $33,333 (rounded up to the nearest dollar). Option C is the correct answer.

A Company's Selling Price Is $12 Per Unit,variable Cost Is