Jones Blanket Company sells blankets for $25 each.The variable cost of each blanket is $10.If fixed cost is $4,500,000,then the break-even point is 300,000 units.

Question

Quizplus · Accepted Answer

To calculate the break-even point, we use the formula:

Break-even point = Fixed costs / (Price per unit - Variable cost per unit)

Substituting the given values: 
Price per unit = $25 
Variable cost per unit = $10 
Fixed costs = $4,500,000

Break-even point = $4,500,000 / ($25 - $10) 
Break-even point = 300,000 units

Hence, the statement is true and the answer is A.

Jones Blanket Company Sells Blankets for $25 Each