Citation Manufacturing produces electronic components that sell for $600 each. The fixed production costs are $720,000 when 30,000 or fewer components are produced, and variable production costs are $510 per component. What is Citation's operating breakeven point?

Question

Quizplus · Accepted Answer

The operating breakeven point is calculated by dividing the fixed costs by the difference between the selling price per unit and the variable cost per unit. Here, it is $720,000 / ($600 - $510) = 8,000 components.

Citation Manufacturing Produces Electronic Components That Sell for $600 Each