The selling price of a widget is $15 and the fixed cost per month is $4,800. The variable cost per widget is $9. Calculate the break-even point in units per month.
A) 320
B) 533
C) 800
D) 200
E) 400

Question

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing the fixed costs by the contribution margin per unit. The contribution margin per unit is the selling price minus the variable cost per unit, which is $15 - $9 = $6. Therefore, the break-even point is $4,800 / $6 = 800 units.

The Selling Price of a Widget Is $15 and the Fixed