Loretta & Nieces has fixed costs are $200,000. The price of each unit sold is $12,...
Loretta & Nieces has fixed costs are $200,000. The price of each unit sold is $12, and the variable cost per unit is $8. How many units must the firm sell to reach the break-even point?
A. 50,000 units
B. 16,667 units
C. 25,000 units
D. not enough information has been provided to determine the break-even point
Homework Answers
| Calculation of Breakeven point in units | ||
| Selling price per unit | $ 12.00 | |
| Variable cost per unit | $ 8.00 | |
| Contribution per unit= Selling price less variable cost | $ 4.00 | |
| Fixed cost | $ 200,000.00 | |
| Break-even point in units= | Fixed cost/contribution per unit | |
| Break-even point in units= | 200000/4 | |
| Break-even point in units= | 50,000.00 | |
| Hence option A is correct | ||
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