To determine the breakeven point in units, divide the fixed costs by
A) total costs.
B) variable costs times price.
C) price minus variable costs.
D) price per unit.
E) total revenue minus fixed costs.

Question

Quizplus · Accepted Answer

The breakeven point in units is where the total revenue from selling a certain number of units is equal to the total cost of producing those units. Therefore, we need to find the sales level where the revenue covers the variable costs and fixed costs. This can be represented as: price x quantity = variable costs x quantity + fixed costs. By simplifying this equation, we arrive at the equation for breakeven point: quantity = fixed costs / (price - variable costs per unit). Therefore, the correct choice is C, as it represents this equation.

To Determine the Breakeven Point in Units, Divide the Fixed