Assume an organization must invest $100,000 in fixed costs to produce a product that sells for $100 and requires $50 in variable costs to produce one unit. What is the organization's breakeven volume?

Question

Quizplus · Accepted Answer

The breakeven volume is calculated by dividing the fixed costs by the contribution margin per unit (selling price - variable cost). Here, it is $100,000 / ($100 - $50) = 2000 units.

Assume an Organization Must Invest $100,000 in Fixed Costs to Produce