Zealz Manufacturing produces a single product that sells for $80.Variable costs per unit equal $30.The company expects total fixed costs to be $70,000 for the next month at the projected sales level of 2,000 units.In an attempt to improve performance,management is considering a number of alternative actions.Each situation is to be evaluated separately.What is the current breakeven point in terms of number of units?

Question

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 per unit minus the variable cost per unit, which is $80 - $30 = $50. The breakeven point is $70,000 / $50 = 1,400 units.

Zealz Manufacturing Produces a Single Product That Sells for $80