Dancer Corp.has a selling price of $20 per unit,and variable costs of $10 per unit.When 12,000 units are sold,profits equaled $35,000.How many units must be sold to break-even?
A)32,300
B)20,400
C)24,366
D)8,500

Question

Quizplus · Accepted Answer

The break-even point is where total costs equal total revenue, meaning there is no profit or loss. To find the break-even point in units, we can use the formula: Break-even point in units = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). Given that the profit at 12,000 units sold is $35,000, we can calculate the fixed costs. Profit = Total Revenue - Total Costs, and Total Revenue = Selling Price per Unit * Quantity Sold. So, $35,000 = ($20 * 12,000) - (Fixed Costs + $10 * 12,000). Solving this equation gives us the Fixed Costs. Once we have the Fixed Costs, we can calculate the break-even point.