Exhibit 21-5 The following is a partial income statement for Duncan Corporation for 2011:

- Refer to Exhibit 21-5. How many units of its product will Duncan Corporation have to sell to break even?

Question

Exhibit 21-5 The following is a partial income statement for Duncan Corporation for 2011:

- Refer to Exhibit 21-5. How many units of its product will Duncan Corporation have to sell to break even?

Quizplus · Accepted Answer

To calculate the break-even point, we need to use the following formula:

Break-even point (in units) = Fixed costs ÷ Contribution margin per unit

In the given partial income statement, the fixed costs are $12,000 and the contribution margin per unit is $20 - $10 = $10.

Thus,

Break-even point (in units) = $12,000 ÷ $10 = 1,200 units

Therefore, to break even, Duncan Corporation will have to sell 1,200 units of its product.

Exhibit 21-5 the Following Is a Partial Income Statement for Duncan