Dreary Days,Inc.sells raincoats at a selling price of $25.00 for each raincoat.The variable cost per raincoat is $16.25.Total fixed costs are $142,000.The breakeven point in units is:
A)5,680
B)8,738
C)16,229
D)16,000

Question

Quizplus · Accepted Answer

To calculate the breakeven point in units, we use the following formula:

Breakeven Point (units) = Total Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)

Substituting the given values, we get:

Breakeven Point (units) = 142,000 / (25.00 - 16.25) 
Breakeven Point (units) = 16,229

Therefore, the breakeven point in units is 16,229. The best choice is only C.