J.I.T Auto sells its cars for $20,000 per unit (car).Variable costs are currently 60% of sales revenue.Fixed expenses are $480,000,000 per year.
What is the breakeven point in units at the current selling price?

Question

Quizplus · Accepted Answer

C)
Sales Price $20,000
× Variable Costs 60%
VC = $12,000
Sales Price $20,000
Less VC 12,000
Contribution Margin $8,000
Fixed Cost $480,000,000 / CM 8,000 = 60,000 units

JIT Auto Sells Its Cars for $20,000 Per Unit (Car)