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LO 3.2If a company has fixed costs of $6,000 per month and their product that sells for $200 has a contribution margin ratio of 30%, how many units must they sell in order to break even?

100
180
200
2,000

Respuesta :

mchaid015

Answer:

Correct answer is 100 units

Explanation:

Break-even in unit formula is unit contribution margin divided by total fixed cost. To illustrate further, computation is as follows:

Step 1. Compute the unit contribution margin. We have to multiply unit sales price to the contribution margin ratio given to get it.

unit sales price  $200 x 20% = $60

Step 2. Compute the Break-even in units by dividing total fixed cost by the unit contribution margin.

BEP = total fixed cost / unit contribution margin

BEP = $6,000 / $60

BEP = 100 units

Parrain

The fact that the company has a contribution margin ratio of 30% and a selling price of $200 means that to breakeven, they need to sell 100 units.

How many units should the company sell to breakeven?

The company can breakeven if they sell:
= Fixed costs / ( Contribution margin ratio x Selling price)

Solving gives:

= 6,000 / ( 200 x 30%)

= 6,000 / 60

= 100 units

Find out more on breakeven quantity at https://brainly.com/question/21137380.

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