Fantasmas Incorporated had the following information: $\begin{array}{lrr}
\text { Activity Driver } & \text { Unit Variable Cost } & \text { Level of Activity Drive } \
\text { Units sold } & \$ 20&-- \
\text { Setups } & 1,200 &60\
\text { Engineering hours } & 52&1,500\\
\text { Other data: }\
\text { Total fixed costs (traditional) } & \$ 600,000 \
\text { Total fixed costs }(A B C) & \$ 360,000 \
\text { Unit selling price } & \$60
\end{array}$
What is the break-even point in units using ABC?

Question

Quizplus · Accepted Answer

The break-even point in units using ABC is calculated by dividing the total fixed costs by the contribution margin per unit. The contribution margin per unit is the selling price minus the variable costs per unit. Total variable costs per unit are calculated by adding the unit variable cost of setups and engineering hours to the unit variable cost of units sold. The break-even point is then calculated as follows: $(\$360,000) / (\$60 - (\$20 + (\$1,200 \times 60/units) + (\$52 \times 1,500/units))) = 12,750$ units.

Fantasmas Incorporated Had the Following Information What Is the Break-Even Point in Units Using ABC? A)6,325

Fantasmas Incorporated Had the Following Information What Is the Break-Even Point in Units Using ABC?
A)6,325