Rogue Tire Masters has fixed costs of $220,000.Tires sell for $95 each and have a unit variable cost of $45.What is Rogue's break-even point in units?
A) 4,000
B) 4,400
C) 5,200
D) 5,500

Question

Quizplus · Accepted Answer

To find the break-even point, we need to use the following formula:
Break-even point (in units) = Fixed costs ÷ (Selling price per unit − Variable cost per unit)

Plugging in the values given in the question, we get:

Break-even point (in units) = $220,000 ÷ ($95 − $45) = 4,400

Therefore, the answer is B, 4,400.

Rogue Tire Masters Has Fixed Costs of $220,000