Dunkin Company manufactures and sells a single product that sells for $480 per unit; variable costs are $300. Annual fixed costs are $990,000. Current sales volume is $4,200,000. Compute the break-even point in units.

Question

Quizplus · Accepted Answer

To calculate the breakeven point, we use the formula:

Breakeven Point (Units) = Fixed Costs / (Sales Price per Unit - Variable Cost per Unit)

Plugging in the given values, we get:

Breakeven Point (Units) = $990,000 / ($480 - $300) = 5,500 units

Therefore, the answer is (C) 5,500.

Dunkin Company Manufactures and Sells a Single Product That Sells