A firm has fixed operating costs of $10,000, the sale price per unit of its product is $25, and its variable cost per unit is $15. The firm's operating break-even point in units is___________ and its breakeven point in dollars is___________ .
A) 400; $10,000
B) 250; $ 6,250
C) 667; $16,675
D) 1,000; $25,000

Question

Quizplus · Accepted Answer

The break-even point in units is calculated as fixed costs divided by the contribution margin per unit (sale price - variable cost), which is $10,000 / ($25 - $15) = 1,000 units. The break-even point in dollars is the break-even point in units multiplied by the sale price per unit, which is 1,000 units * $25 = $25,000.

A Firm Has Fixed Operating Costs of $10,000, the Sale