A company has total fixed costs of $400,000.Its fixed-cost contribution per unit is $10.00,and its price per unit is $5.00.What is the break-even point in sales dollars?
A)$200,000
B)$2,000,000
C)$4,000,000
D)$800,000
E)This cannot be determined with the information provided.

Question

Quizplus · Accepted Answer

The BEP,in units,can be found by dividing total fixed costs (TFC)by the fixed-cost (FC)contribution per unit.The fixed-cost (FC)contribution per unit is the assumed selling price per unit minus the variable cost per unit.The BEP can also be figured in dollars.The easiest way is to compute the BEP in units and then multiply by the assumed per-unit price.

A Company Has Total Fixed Costs of $400,000