.Given the following information extracted from the income statement of Widget Company ( Widget Company has no depreciation or expense or opening or closing inventory),

The break-even point for Widget Company is:
A)64,286 units
B)107,135 units
C)117,857 units
D)500,000 units

Question

.Given the following information extracted from the income statement of Widget Company ( Widget Company has no depreciation or expense or opening or closing inventory),

The break-even point for Widget Company is:
A)64,286 units 
B)107,135 units 
C)117,857 units 
D)500,000 units

Quizplus · Accepted Answer

The formula for calculating the break-even point is Total fixed costs ÷ (Price per unit - Variable cost per unit).

Fixed costs in this case are $750,000.

The selling price per unit is $25.

Variable costs per unit are $10 ($6 + $2 + $2).

Break-even point = $750,000 ÷ ($25 - $10) = 107,140 units (rounded to the nearest whole number).

Therefore, the answer is B) 107,135 units.

Given the Following Information Extracted from the Income Statement of Widget