Question
JVL Enterprises has set a target profit of $126,000. The company sells a single product for $50 per unit. Variable costs are $15 per unit and fixed costs total $98,000. How many units does JVL have to sell to BREAK-EVEN?
Multiple choice question.
6,400
1,960
3,600
2,800
Multiple choice question.
6,400
1,960
3,600
2,800
Answers
GPT-4o mini
To find the break-even point in units, we can use the formula:
Break-even point (in units) = Fixed Costs / Contribution Margin per unit
First, we need to calculate the contribution margin per unit:
Contribution Margin per unit = Selling Price per unit - Variable Cost per unit
Contribution Margin per unit = $50 - $15 = $35
Next, we can calculate the break-even point:
Break-even point (in units) = Fixed Costs / Contribution Margin per unit
Break-even point (in units) = $98,000 / $35 ≈ 2,800 units
Therefore, JVL Enterprises has to sell **2,800 units** to break even.
The correct answer is: **2,800**.
Break-even point (in units) = Fixed Costs / Contribution Margin per unit
First, we need to calculate the contribution margin per unit:
Contribution Margin per unit = Selling Price per unit - Variable Cost per unit
Contribution Margin per unit = $50 - $15 = $35
Next, we can calculate the break-even point:
Break-even point (in units) = Fixed Costs / Contribution Margin per unit
Break-even point (in units) = $98,000 / $35 ≈ 2,800 units
Therefore, JVL Enterprises has to sell **2,800 units** to break even.
The correct answer is: **2,800**.