Amanti Lighting sells a lamp kit for making personalized lighting.The company sells each lamp kit for $22.The average variable cost for each lamp kit is $13,and the total annual fixed costs for plant operation is $78,300.What is the break-even point in units?
A) 8,700
B) 2,237
C) 6,023
D) 3,559

Question

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing the total fixed costs by the contribution margin per unit (selling price per unit minus variable cost per unit). Here, it is $78,300 / ($22 - $13) = 8,700 units.

Amanti Lighting Sells a Lamp Kit for Making Personalized Lighting