Cup-shirt,a T-shirt company,is conducting a breakeven analysis on unbleached cotton tops.Fixed costs are $100,000 and the per-unit contribution to fixed costs is $20.To break even,the company must sell _____ units.
A)20,000
B)5,000
C)500
D)200

Question

Quizplus · Accepted Answer

The formula for breakeven point in units is:
Breakeven Point (Units) = Fixed Costs / Contribution Margin per Unit

Plugging in the given values:
Breakeven Point (Units) = $100,000 / $20 = 5,000 units

Therefore, the company must sell 5,000 units to break even.

Cup-Shirt,a T-Shirt Company,is Conducting a Breakeven Analysis on Unbleached Cotton