Breakeven output is equal to total fixed cost divided by the contribution margin per unit.

Name: Breakeven output is equal to total fixed cost divided by the contribution margin per unit.
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Question

Quizplus · Accepted Answer

Breakeven output is calculated by dividing the total fixed costs by the contribution margin per unit, which is the selling price per unit minus the variable cost per unit. This formula gives the number of units that must be sold to cover all fixed costs, achieving a net income of zero.

Breakeven Output Is Equal to Total Fixed Cost Divided by the Contribution