The following is last month's contribution format income statement:
What is the company's break-even in unit sales?

Question

The following is last month's contribution format income statement: 
What is the company's break-even in unit sales?

Quizplus · Accepted Answer

To find the break-even point in units, we need to divide the total fixed costs by the contribution margin per unit. Using the information from the contribution format income statement, the total fixed costs are $60,000 ($40,000 + $20,000). The contribution margin per unit is $6.00 ($15.00 - $9.00). 
Therefore, the break-even point in units is: 
$60,000 / $6.00 = 10,000 units 
Since the company is already selling 4,000 units a month, its break-even point will be lower: 
10,000 - 4,000 = 6,000 units. 
Therefore, the correct answer is C) 6,000 units.

The Following Is Last Month's Contribution Format Income Statement