Nunn Company produces a single product. Following is cost information: Variable Cost
Fixed Costs Per Unit
Manufacturing costs $35,000 $15
Non-manufacturing costs 60,000 10
If the product sells for $60, how many units must be sold to break even?
A)1,000
B)2,375
C)2,714
D)3,800

Question

Quizplus · Accepted Answer

To find the break-even point, use the formula: Break-even units = Total Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). Total Fixed Costs = $35,000 + $60,000 = $95,000. Variable Cost per Unit = $15 + $10 = $25. Break-even units = $95,000 / ($60 - $25) = 2,714 units.

Nunn Company Produces a Single Product