Atamony makes circuit boards and markets them to electronic goods manufacturers. The firm has nonsalary fixed costs of $112,000 and salary costs of $64,250. Each circuit board is sold at a price of $69 and involves variable costs of $46 per unit. What is the break-even point for Atamony? (Round to nearest whole unit.)
A) 5,105 circuit boards
B) 7,663 circuit boards
C) 6,237 circuit boards
D) 2,714 circuit boards

Question

Quizplus · Accepted Answer

The break-even point is calculated by dividing total fixed costs by the contribution margin per unit. Total fixed costs are $112,000 + $64,250 = $176,250. The contribution margin per unit is $69 - $46 = $23. Thus, the break-even point is $176,250 / $23 = 7,663 circuit boards.

Atamony Makes Circuit Boards and Markets Them to Electronic Goods