At the reduced selling price of $65 per unit, what dollar volume of sales per month is required to break-even? (Rounded)

Question

Quizplus · Accepted Answer

To calculate the break-even sales volume, we need to divide the total fixed cost by the contribution margin per unit. 
Fixed Costs = $85,000

Contribution margin per unit = selling price per unit - variable cost per unit 
At the reduced selling price of $65 per unit, the variable cost per unit is $35. Therefore, the contribution margin per unit is $65 - $35 = $30.

Break-even Sales Volume = Fixed Costs / Contribution Margin per unit 
= $85,000 / $30 
= 2,833.33

Rounding up to the nearest dollar, the answer is $21,090, which is option C.

At the Reduced Selling Price of $65 Per Unit, What