Question
A company has a target profit of $204,000. The company's fixed costs are $305,000. The contribution margin per unit is $40. The BREAK-EVEN point in unit sales is Blank______.
Multiple choice question.
5,100
12,725
7,625
Multiple choice question.
5,100
12,725
7,625
Answers
GPT-4o mini
To calculate the break-even point in unit sales, we can use the break-even formula:
\[
\text{Break-even point (units)} = \frac{\text{Total Fixed Costs}}{\text{Contribution Margin per Unit}}
\]
Given:
- Fixed Costs = $305,000
- Contribution Margin per Unit = $40
Now, plugging in the values:
\[
\text{Break-even point (units)} = \frac{305,000}{40} = 7,625
\]
Therefore, the break-even point in unit sales is **7,625**.
\[
\text{Break-even point (units)} = \frac{\text{Total Fixed Costs}}{\text{Contribution Margin per Unit}}
\]
Given:
- Fixed Costs = $305,000
- Contribution Margin per Unit = $40
Now, plugging in the values:
\[
\text{Break-even point (units)} = \frac{305,000}{40} = 7,625
\]
Therefore, the break-even point in unit sales is **7,625**.