It costs $50,000 to start a production process. Variable cost is $25 per unit and revenue is $45 per unit. What is the break-even point?
A) 1000 units
B) 1111 units
C) 2000 units
D) 2500 units

Question

Quizplus · Accepted Answer

The break-even point is calculated by dividing the fixed costs by the difference between the unit selling price and the variable cost per unit. Here, it's $50,000 / ($45 - $25) = 2500 units.

It Costs $50,000 to Start a Production Process