Jamie Quinn, a sole proprietor, has the following projected figures for next year: $\begin{array} { l }
\text { Selling price per unit}&\$150.00\
\text { Contribution margin per unit}&\$45.00\
\text {Total fixed costs }&\$630,000\
\end{array}$
What is the break-even point in dollars?

Question

Jamie Quinn, a sole proprietor, has the following projected figures for next year: $\begin{array} { l  }
 \text { Selling price per unit}&\$150.00\
 \text { Contribution margin per unit}&\$45.00\
 \text {Total fixed costs }&\$630,000\
\end{array}$
 What is the break-even point in dollars?

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing total fixed costs by the contribution margin per unit: $630,000 / $45 = 14,000 units. To find the break-even point in dollars, multiply the break-even point in units by the selling price per unit: 14,000 units * $150 = $2,100,000.

Jamie Quinn, a Sole Proprietor, Has the Following Projected Figures