Figure 8-2
Lewis Production Company had the following projected information for 2011: $\begin{array}{lr}
\text { Selling price per unit } & £ 150 \
\text { Variable cost per unit } & £ 90 \
\text { Total fixed costs } & £ 300,000
\end{array}$
-Refer to Figure 8-2. What is the break-even point in units?
A)2,000 units
B)5,000 units
C)3,333 units
D)60,000 units

Question

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing the total fixed costs by the contribution margin per unit (selling price per unit minus variable cost per unit). Here, it is £300,000 / (£150 - £90) = 5,000 units.

Figure 8-2 Lewis Production Company Had the Following Projected Information

Figure 8-2
Lewis Production Company Had the Following Projected Information