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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 unit80 Variablecostperunit80  Variable cost 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

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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 = 150,000Sellingpriceperunit=150,000 Selling price per unit = 80 Variable cost per unit = $50

Substituting these values into the formula:

Break-even point in units = 150,000/(150,000 / (80 - 50)=50) = 150,000 / $30 = 5,000 units

So, the correct answer is d. 5,000.

This problem has been solved

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