Healthy Greetings Corporation produces and sells fruit baskets for special events.The unit selling price is $60,unit variable costs are $45,and total fixed costs are $2,670.How many fruit baskets must Healthy Greetings Corporation sell to breakeven?

Question

Quizplus · Accepted Answer

To break even, the company needs to cover its total fixed costs ($2,670) and variable costs per unit ($45) with the revenue generated per unit ($60). 
The contribution margin per unit is $60 - $45 = $15. 
To break even, the company needs to sell enough units to cover the fixed costs and also generate enough contribution margin to cover the variable costs. 
Break-even point in units = Total fixed costs / Contribution margin per unit 
Break-even point in units = $2,670 / $15 = 178 units. 
Therefore, the best choice is C.

Healthy Greetings Corporation Produces and Sells Fruit Baskets for Special