A firm sells a product for $250. Variable costs are $100 per unit and total fixed costs are $120 000. The break-even point will be 800 units.

Question

Quizplus · Accepted Answer

The break-even point can be calculated as:

Break-even point in units = Total fixed costs / (Price per unit - Variable cost per unit)
Break-even point in units = $120,000 / ($250 - $100)
Break-even point in units = 800 units

Since the given break-even point matches with the calculated break-even point, the answer is A) True.

A Firm Sells a Product for $250