Adams Company sells a product whose contribution margin is $10 and selling price is $25.If the company's break-even point is 100 units,its total fixed costs must be $500.

Question

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing the total fixed costs by the contribution margin per unit. If the break-even point is 100 units and the contribution margin per unit is $10, then the total fixed costs are $1,000 (100 units * $10 per unit).

Adams Company Sells a Product Whose Contribution Margin Is $10