If variable costs = $10.00 per unit; and the selling price = $13.00 per unit, and the break-even point in units = 100,000, calculate the fixed costs.

Question

Quizplus · Accepted Answer

The break-even point in units is calculated as Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). Given the break-even point is 100,000 units, the selling price is $13.00, and the variable cost is $10.00, we can rearrange the formula to solve for Fixed Costs: Fixed Costs = Break-Even Point in Units * (Selling Price per Unit - Variable Cost per Unit) = 100,000 * ($13.00 - $10.00) = 100,000 * $3.00 = $300,000.

If Variable Costs = $10