Tucker Corp. Tucker Corp. has the following product information:
Refer to the Tucker Corp. information above. What is the break-even point in units?

Question

Tucker Corp. Tucker Corp. has the following product information:
 Refer to the Tucker Corp. information above. What is the break-even point in units?

Quizplus · Accepted Answer

Break-even point in units = Fixed costs/Contribution margin per unit
Fixed costs = $70,000
Contribution margin per unit = $15 (Sales price per unit - Variable cost per unit)
Break-even point in units = $70,000/$15 = 4,666.67 units
The closest option is 9,375 units, which is twice the calculated break-even point. Therefore, D is the best choice.