Christian Company's sales revenue for 20xx was $144,000. Christian's product sells for $5.50 and has a 30 percent contribution margin. Christian has fixed costs of $33,000. What is Christian Company's breakeven point in units?

Question

Quizplus · Accepted Answer

The breakeven point in units is calculated by dividing the fixed costs by the contribution margin per unit. The contribution margin per unit is the selling price minus the variable cost per unit. With a 30% contribution margin, the contribution margin per unit is $5.50 * 0.30 = $1.65. The breakeven point is $33,000 / $1.65 = 20,000 units.

Christian Company's Sales Revenue for 20xx Was $144,000