The break-even point for the entire company is closest to:
A)$43,557
B)$26,570
C)$22,430
D)$45,680

Question

Quizplus · Accepted Answer

The break-even point is the point at which total revenue equals total cost. To calculate the break-even point, we need to know the fixed costs and the variable costs. The fixed costs are the costs that do not change with the level of output, such as rent and salaries. The variable costs are the costs that change with the level of output, such as raw materials and labor.In this case, the fixed costs are $20,000 and the variable costs are $1.50 per unit. To calculate the break-even point, we can use the following formula:Break-even point = Fixed costs / (Selling price per unit - Variable cost per unit)Break-even point = $20,000 / ($2.00 - $1.50)Break-even point = $20,000 / $0.50Break-even point = 40,000 unitsTherefore, the break-even point for the entire company is closest to 40,000 units.

The Break-Even Point for the Entire Company Is Closest To