Sutherland Company has the following product information: Sales price per unit$80 Variable cost per unit$50 Total fixed costs$150,000What is the break-even point in units?Question 10Select one:a.1,154b.1,875c.3,000d.5,000e.None of these is correct
Question
Sutherland Company has the following product information: Sales price per unit50 Total fixed costs$150,000What is the break-even point in units?Question 10Select one:a.1,154b.1,875c.3,000d.5,000e.None of these is correct
Solution
The break-even point in units can be calculated using the formula:
Break-even point in units = Total fixed costs / (Selling price per unit - Variable cost per unit)
Given in the problem: Total fixed costs = 80 Variable cost per unit = $50
Substituting these values into the formula:
Break-even point in units = 80 - 150,000 / $30 = 5,000 units
So, the correct answer is d. 5,000.
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