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?
Homework Answers
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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