If the sale price per unit is $95,total fixed expenses are $480,000,and the breakeven sales in dollars is $800,000,what is the variable expense per unit?

Question

Quizplus · Accepted Answer

Breakeven sales in units = Total fixed expenses / Contribution margin per unit
Contribution margin per unit = Sale price per unit - Variable expense per unit
Breakeven sales in dollars = Breakeven sales in units x Sale price per unit
So, we can find the Breakeven sales in units as:
800,000 = Breakeven sales in units x 95
Breakeven sales in units = 8,421.05 units
Now, we can find the Variable expense per unit as:
Total expenses = Total fixed expenses + Total variable expenses
Total variable expenses = Variable expense per unit x Number of units sold
When Number of units sold = Breakeven sales in units, then Total expenses = Total fixed expenses
So, we can write:
480,000 = Variable expense per unit x 8,421.05
Variable expense per unit = $38.00.

Therefore, the answer is C) $38.00.

If the Sale Price Per Unit Is $95,total Fixed Expenses