Mustang Corp. has a selling price of $15, variable costs of $10 per unit, and fixed...

Question

Question

Mustang Corp. has a selling price of $15, variable costs of $10 per unit, and fixed costs of $35,000. How many units must be sold to break-even?

a) 14,000

b) 7,000

c) 2,334

d) 3,500

Answer 1

Answer #1

Contribution margin per unit = Selling price per unit - Variable costs per unit

= $15 - $10

= $5

Break-even units = Fixed costs / Contribution margin per unit

= $35,000 / $5

= 7,000

The answer is Option b.

Answer 2

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