Baker Company sells its product for $60.In addition,it has a variable cost ratio of 40 percent and total fixed costs of $9,000.What is the break-even point in units for Baker Company?

Question

Quizplus · Accepted Answer

The break-even point in units can be calculated using the formula: Break-even point in units = Total Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). Given that the selling price is $60 and the variable cost ratio is 40%, the variable cost per unit is 40% of $60, which is $24. Therefore, the break-even point in units = $9,000 / ($60 - $24) = $9,000 / $36 = 250 units.

Baker Company Sells Its Product for $60