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Alpha Company's fixed costs for the year amounted to $450,000 and its unit contribution margin was...

Alpha Company's fixed costs for the year amounted to $450,000 and its unit contribution margin was $30 per unit. Beta Company's fixed costs for the year also amounted to $450,000 but its unit contribution margin was $20 per unit. Which company had the higher break-even point?

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Answer #1

Answer :- Which company had the higher break even point :-

Break Even Point = Fixed Cost / Contribution margin per unit

Alpha = $450,000 / $30 = 15,000

Beta = $450,000 / $20 = 22,500

According to the above calculation we can say that Beta Company had the higher break-even point.

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