Fixed costs divided by contribution margin per unit equals the breakeven point in unit sales.

Name: Fixed costs divided by contribution margin per unit equals the breakeven point in unit sales.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This statement is correct. The formula for calculating the breakeven point in unit sales is:

Breakeven Point in Units = Fixed Costs / Contribution Margin Per Unit

Therefore, if we know the fixed costs and the contribution margin per unit, we can calculate the breakeven point in unit sales.

Fixed Costs Divided by Contribution Margin Per Unit Equals the Breakeven