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If variable costs = $10.00 per unit; and the selling price = $13.00 per unit, and...

If variable costs = $10.00 per unit; and the selling price = $13.00 per unit, and the break-even point in units = 100,000, calculate the amount of fixed costs.

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Answer #1

Break-even point = Fixed cost/Contribution per unit

100,000 = Fixed costs/($13-$10)

Fixed costs= $300,000

Hence, fixed costs are $300,000

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