Question

The break-even point in units can be obtained by dividing total fixed expenses by the unit contribution margin

True or False

Answer 1

False. The break-even point in units is obtained by dividing total fixed expenses by the contribution margin per unit.

Step-by-step explanation:

False

The break-even point in units can be obtained by dividing total fixed expenses by the unit contribution margin. This is incorrect. The break-even point in units is actually obtained by dividing total fixed expenses by the contribution margin per unit.

To calculate the break-even point in units, you need to divide the total fixed expenses by the contribution margin per unit. The contribution margin per unit is the difference between the unit selling price and the unit variable expenses. By dividing the total fixed expenses by the contribution margin per unit, you can determine the number of units that need to be sold in order to cover the fixed expenses and break even.