Fixed costs for a product are $50,000.The product itself sells for $5.00 and it costs $3.00 to make each product.What is the break-even point for the product?
A)100,000
B)10,000
C)50,000
D)25,000

Question

Quizplus · Accepted Answer

The break-even point is calculated by dividing the fixed costs by the contribution margin per unit (selling price - variable cost per unit). Here, it is $50,000 / ($5.00 - $3.00) = 25,000 units.

Fixed Costs for a Product Are $50,000