If a company's selling price is $5,variable cost is $3 and fixed costs are $100 000,the break-even sales point is

Question

Quizplus · Accepted Answer

The formula for calculating the break-even point in units is:

Break-even Point (units) = Fixed Costs ÷ (Selling Price per Unit - Variable Cost per Unit)

Plugging in the values given in the question:

Break-even Point (units) = $100,000 ÷ ($5 - $3)
Break-even Point (units) = $100,000 ÷ $2
Break-even Point (units) = 50,000 units

Therefore, the correct answer is (C) 50,000 units. This means that the company needs to sell 50,000 units to cover its fixed and variable costs and break even.

If a Company's Selling Price Is $5,variable Cost Is $3