Tykee Company has the following data: Variable costs are 75% of the unit selling price.
The contribution margin per unit is $400.
The fixed costs are $600,000.
Which of the following expresses the break-even point?

Question

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing the total fixed costs by the contribution margin per unit. Since the contribution margin is 25% of the selling price (100% - 75% variable costs), the break-even point is $600,000 ÷ 0.25.

Tykee Company Has the Following Data: Variable Costs Are 75