If fixed costs are $500,000 and the unit contribution margin is $20, the break-even point in units if fixed costs are reduced by $80,000 is

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Quizplus · Accepted Answer

The break-even point in units is calculated by dividing the fixed costs by the unit contribution margin. If fixed costs are reduced by $80,000, the new fixed costs would be $500,000 - $80,000 = $420,000. Dividing this by the unit contribution margin of $20 gives a break-even point of 21,000 units.

If Fixed Costs Are $500,000 and the Unit Contribution Margin