Terabyte Visions charges $7,500 for each new website that it develops. Its total fixed costs per year are $324,000, while its variable costs are $1,500 per website. What is Terabyte Visions' break-even point?
A) 43 websites
B) 54 websites
C) 100 websites
D) 216 websites

Question

Quizplus · Accepted Answer

Breakeven is calculated as fixed costs ($324,000) divided by contribution margin per unit (sales less variable costs, or $7,500 F1F1F1S1?F1F1F10 $1,500 = $6,000). $324,000 ÷ $6,000 = 54 websites as the annual break-even point.

Terabyte Visions Charges $7,500 for Each New Website That It