Neucon company needs to sell 6,000 circuit breakers to break even. Its unit variable cost is $441, and each unit sells for $800. What is the fixed cost of this company?
A) $1,497,250
B) $2,154,000
C) $2,855,250
D) $4,652,500

Question

Quizplus · Accepted Answer

The fixed cost can be calculated using the break-even formula: Fixed Costs = (Selling Price per Unit - Variable Cost per Unit) * Break-even Quantity. Here, it is ($800 - $441) * 6,000 = $2,154,000.

Neucon Company Needs to Sell 6,000 Circuit Breakers to Break