Roundstreet Company sells a product for $14. Variable costs are $7 per unit, and total fixed costs are $7,000. What is the break-even point in units?
A) 210
B) 504
C) 1,000
D) 7,000

Question

Quizplus · Accepted Answer

The break-even 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 $14 - $7 = $7. Therefore, the break-even point is $7,000 / $7 = 1,000 units.

Roundstreet Company Sells a Product for $14