Summersville Production Company had the following projected information for the current year: $\begin{array} { l }
\text { Selling price per unit}&\$150\
\text { Variable cost per unit}&\$90,000\
\text {Total fixed costs }&\$300,000\
\end{array}$

What is the break-even point in units?

Question

Summersville Production Company had the following projected information for the current year: $\begin{array} { l  }
 \text { Selling price per unit}&\$150\
 \text { Variable cost per unit}&\$90,000\
 \text {Total fixed costs }&\$300,000\
\end{array}$

What is the break-even point in units?

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing the total fixed costs by the contribution margin per unit. The contribution margin per unit is the selling price per unit minus the variable cost per unit. Here, the contribution margin per unit is $150 - $90 = $60. Therefore, the break-even point is $300,000 / $60 = 5,000 units.

Summersville Production Company Had the Following Projected Information for the Current