Given a fixed cost of $40,000 and a contribution margin of $800 per unit, how many units must be sold to break even?

Multiple choice question for Cost Volume Profit Analysis. Select an option, then review the explanation below.

Explanation

To find the breakeven point in units, divide the fixed cost by the contribution margin per unit: $40,000 ÷ $800 = 50 units. Therefore, the breakeven quantity is 50 units.

Practice related questions from the same subject.

1.What is obtained when the fixed costs are divided by the contribution margin per unit?
2.Given a contribution margin ratio of 30% and a selling price of $5,000, what is the contribution margin amount for each unit?
3.Given a contribution margin of $13,000 and total variable costs amounting to $7,000, what is the total revenue?
4.Given a selling price of $5000 and a contribution margin per unit of $1000, what is the contribution margin percentage?
5.Given a revenue of $15,000, variable costs totaling $5,000, and fixed costs amounting to $2,000, what is the operating income?

Given a fixed cost of $40,000 and a contribution margin of $800 per unit, how many units must be sold to break even?

Explanation

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