Mignon d'Armitage manufactures jewellery. This firm is planning to introduce a new necklace and is trying to determine how many units it must sell in order to break even. The variable cost for each unit will be $20, and it is expected to sell the necklace at a price of 45 each. At a fixed cost of $100,000, how many units must be sold to break even?
A) 2,500
B) 4,000
C) 5,000
D) 7,500

Question

Quizplus · Accepted Answer

The break-even point in units can be calculated using the formula: Break-even point = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). Plugging in the given values: $100,000 / ($45 - $20) = $100,000 / $25 = 4,000 units.

Mignon D'Armitage Manufactures Jewellery