A company sells a product which has a unit sales price of $5, unit variable cost of $3 and total fixed costs of $180,000. The number of units the company must sell to break even is Question 9 options:
a.90,000 units
b.36,000 units
c.360,000 units
d.60,000 units

Respuesta :

Answer:

a.90,000 units

Explanation:

For computing the break-even point in units, we need to apply the formula which is shown below:

= ( Total Fixed cost) ÷ (Contribution margin per unit)

where,  

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

= $5 - $3

= $2

And, the other items values would remain the same

Now put these values to the above formula  

So, the value would equal to

= ($180,000) ÷ ($2 per unit)

= 90,000 units

Answer:

break even quantity  is 90,000 units

Explanation:

Given data:

unit sales cost =$5

unit variable cost =$3

Fixed cost $180,000

Number of units required that company sells can be determined by using given relation

[tex]5\times q = 3\times q + 180,000[/tex]

[tex]5\times q -3\times q = 180,000[/tex]

2q = 180,000

 q = 90,000

therefore,  break even quantity  is 90,000 units