An alternative will have fixed costs of $10,000 per month, variable costs of $50 per unit, and revenue of $70 per unit.The break-even point volume is:

Question

Quizplus · Accepted Answer

To find the break-even point, we need to determine the quantity of units that need to be sold to cover the total cost of production.

The formula for the break-even point is:

Break-even point = Fixed Costs / (Price per Unit - Variable Costs per Unit)

Plug in the values for the alternative:

Break-even point = $10,000 / ($70 - $50) = 500 units

Therefore, the correct answer is C, which corresponds to 500 units. This is the quantity of units that need to be sold to cover the total cost of production and achieve a zero-profit condition.

An Alternative Will Have Fixed Costs of $10,000 Per Month