Grady, Inc. produces a single product and projects the following costs for a normal month in which 100 units are produced and sold: $\begin{array}{lrr}&\text { Manufacturing }&\text { Non-manufacturing }\
\text { Fixed costs } & \$ 8,000 & \$ 5,000 \
\text { Total variable costs } & 7,700 & 6,050
\end{array}$ The selling price per unit is $300. What volume, in units, must Grady sell to break even?
A) 36
B) 58
C) 80
D) 90

Question

Quizplus · Accepted Answer

To find the break-even point, calculate total fixed costs ($8,000 + $5,000 = $13,000) and the contribution margin per unit ($300 - ($7,700/100 + $6,050/100) = $216.50). Break-even units = Total fixed costs / Contribution margin per unit = $13,000 / $216.50 ≈ 60.06. Since the options are whole numbers, the closest higher whole number is 80.

Grady, Inc The Selling Price Per Unit Is $300