How is the break-even point in units calculated?

Question

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing the total fixed costs by the contribution margin per unit. This is because the contribution margin represents the amount of revenue from each unit that goes towards covering the fixed costs, and once those costs are covered, the remaining revenue represents the profit or net operating income. Therefore, by dividing the fixed costs by the contribution margin per unit, we can determine how many units need to be sold in order to cover the fixed costs and break even.

How Is the Break-Even Point in Units Calculated