The firm's fixed costs are $60 000, variable cost per unit is $15 and selling price per unit is $20. The break-even point in sales dollars is

Question

Quizplus · Accepted Answer

The break-even point can be calculated as follows:

Break-even point = Fixed Costs / (Selling Price per unit - Variable Cost per unit)

Break-even point = $60,000 / ($20 - $15)

Break-even point = $60,000 / $5 per unit

Break-even point = 12,000 units

To calculate the break-even point in sales dollars, we need to multiply the break-even point in units by the selling price per unit:

Break-even point in sales dollars = 12,000 units x $20 per unit

Break-even point in sales dollars = $240,000

Therefore, the correct answer is choice C, $240,000.

The Firm's Fixed Costs Are $60 000, Variable Cost Per