A firm with $50,000 in fixed costs, selling price of $25 per unit, and variable costs of $5 a unit is currently operating at breakeven volume. This firm has:
A) profits of zero.
B) losses equal to fixed costs.
C) sales of 5,000 units.
D) profits of $50,000.

Question

Quizplus · Accepted Answer

At breakeven volume, a firm's total revenue equals its total costs, resulting in zero profit.

A Firm with $50,000 in Fixed Costs, Selling Price of $25