If fixed costs are $500,000, the selling price is $10/unit and variable cost is $6/unit, then breakeven in dollars is
A) $5,000,000
B) $125,000
C) $1,250000
D) None of the above

Question

Quizplus · Accepted Answer

The breakeven point in dollars can be calculated using the formula: Breakeven Point (in dollars) = Fixed Costs / (1 - (Variable Costs / Selling Price)). Plugging in the given values: $500,000 / (1 - ($6 / $10)) = $500,000 / (1 - 0.6) = $500,000 / 0.4 = $1,250,000.

If Fixed Costs Are $500,000, the Selling Price Is $10/unit