Planet Company sells a product for $16 per unit, variable cost is $12 per unit, and the total fixed cost is $6,000.What is the break-even point in units?
A) 640 units
B) 1,500 units
C) 1,210 units
D) 1,360 units
E) 1,700 units

Question

Quizplus · Accepted Answer

Unit Contribution Margin = Price - Unit Variable Cost
Unit contribution margin = $16 - $12 = $4
Break-Even Units = Total Fixed Cost / Unit Contribution Margin
Break-even units = $6,000 / $4 = 1,500 units

Planet Company Sells a Product for $16 Per Unit, Variable