The following is last month's contribution format income statement:
$\begin{array}{|l|r|}
\hline \text { Sales }(10,000 \text { units }) & \$ 1,200,000 \
\hline \text { Less: variable expenses } & \$ 00,000 \
\hline \text { Contribution margin } & 400,000 \
\hline \text { Less: fixed expenses } & 240,000 \
\hline \text { Operating income } & \$ 160,000 \
\hline
\end{array}$
What is the company's break-even sales in units?

Question

Quizplus · Accepted Answer

The break-even point in units can be calculated using the formula: Break-even point in units = Fixed expenses / (Selling price per unit - Variable cost per unit). From the given data, the contribution margin is $400,000 for 10,000 units, which means the contribution margin per unit is $40 ($400,000 / 10,000 units). Fixed expenses are $240,000. Therefore, the break-even point in units = $240,000 / $40 = 6,000 units.

The Following Is Last Month's Contribution Format Income Statement What Is the Company's Break-Even Sales in Units? A) 0

The Following Is Last Month's Contribution Format Income Statement What Is the Company's Break-Even Sales in Units?
A) 0