With fixed costs of $50,000 and a variable cost of $5,a $10 widget must sell at least 10,000 units to break even.

Question

Quizplus · Accepted Answer

To calculate the break-even point, we can use the formula:

Break-even point (in units) = Fixed costs / (Price per unit - Variable cost per unit)

Substituting the given values:

Break-even point = $50,000 / ($10 - $5)
Break-even point = $50,000 / $5
Break-even point = 10,000 units

Therefore, the statement is true. The company needs to sell at least 10,000 units to break even.

With Fixed Costs of $50,000 and a Variable Cost of $5,a