Sky High sells helicopters.During the current year,100 helicopters were sold resulting in $820,000 of sales revenue,$250,000 of variable costs,and $342,000 of fixed costs.Breakeven point in units is ________.
A) 80 units
B) 64 units
C) 60 units
D) 78 units

Question

Quizplus · Accepted Answer

The breakeven point in units is calculated by dividing the total fixed costs by the contribution margin per unit. The contribution margin per unit is the sales price per unit minus the variable cost per unit. Here, the sales price per unit is $8,200 ($820,000/100), and the variable cost per unit is $2,500 ($250,000/100). The contribution margin per unit is $5,700 ($8,200 - $2,500). The breakeven point is $342,000 / $5,700 = 60 units.

Sky High Sells Helicopters