Canada Manu Corp.(CMC) reports total fixed costs of $10,000.If its average price per unit is $10 and its variable costs per unit are $3,what is CMC's break-even unit production?
A)1,429
B)1,000
C)500
D)$5,000

Question

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing the total fixed costs by the difference between the unit selling price and the variable cost per unit. Here, it's $10,000 / ($10 - $3) = $10,000 / $7 = 1,429 units.