During this past year,a small publishing company sold 60,000 copies of Super Travel paperbacks (its only product)at $5 per book; total fixed costs were $14,000; and total variable costs were $3 per book.What is this company's breakeven point in units?

Question

Quizplus · Accepted Answer

To find the breakeven point, we need to know the total revenue and total costs at that point. 
Total revenue = Price per unit x Quantity sold = $5 x 60,000 = $300,000 
Total variable costs = Variable cost per unit x Quantity sold = $3 x 60,000 = $180,000 
Total costs = Fixed costs + Total variable costs = $14,000 + $180,000 = $194,000 
Breakeven point = Total costs / Price per unit = $194,000 / $5 per unit = 38,800 units 
Therefore, the best choice is B, which is the closest to 38,800 units.

During This Past Year,a Small Publishing Company Sold 60,000 Copies