Answer the following questions using the information below:
Greene Manufacturing incurred the following expenses during 2015:
$$\begin{array} { l c }
\text { Fixed manufacturing costs } & \$ 112,500 \
\text { Fixed nonmanufacturing costs } & \$ 87,500 \
\text { Unit selling price } & \$ 250 \
\text { Total unit cost } & \$ 100 \
\text { Variable manufacturing cost rate } & \$ 50 \
\text { Units produced } & 1,340 \text { units }
\end{array}$$
-What will be the breakeven point if variable costing is used?
A) 1,334 units
B) 1,125 units
C) 1,000 units
D) 563 units

Question

Answer the following questions using the information below:
Greene Manufacturing incurred the following expenses during 2015:
 $$\begin{array} { l c } 
\text { Fixed manufacturing costs } & \$ 112,500 \
\text { Fixed nonmanufacturing costs } & \$ 87,500 \
\text { Unit selling price } & \$ 250 \
\text { Total unit cost } & \$ 100 \
\text { Variable manufacturing cost rate } & \$ 50 \
\text { Units produced } & 1,340 \text { units }
\end{array}$$
-What will be the breakeven point if variable costing is used?
A) 1,334 units
B) 1,125 units
C) 1,000 units
D) 563 units

Quizplus · Accepted Answer

The breakeven point in units is calculated by dividing total fixed costs by the contribution margin per unit. The contribution margin per unit is the selling price minus the variable cost per unit ($250 - $50 = $200). Total fixed costs are the sum of fixed manufacturing and nonmanufacturing costs ($112,500 + $87,500 = $200,000). Thus, the breakeven point is $200,000 / $200 = 1,000 units.

Answer the Following Questions Using the Information Below: Greene Manufacturing

Answer the Following Questions Using the Information Below:
Greene Manufacturing