If the selling price per unit is $26, the variable expense per unit is $22.00, and the breakeven sales in dollars is $52,000, what are total fixed expenses?

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Quizplus · Accepted Answer

Fixed expenses can be found using the formula for breakeven sales in dollars: Breakeven Sales = (Fixed Expenses / (Selling Price per Unit - Variable Expense per Unit)) * Selling Price per Unit. Rearranging to solve for Fixed Expenses gives us Fixed Expenses = (Breakeven Sales * (Selling Price per Unit - Variable Expense per Unit)) / Selling Price per Unit. Plugging in the given values: Fixed Expenses = ($52,000 * ($26 - $22)) / $26 = $52,000 * $4 / $26 = $8,000.

If the Selling Price Per Unit Is $26, the Variable