Question

the current price per unit for shock absorbers produced by leveland products is $25. The variable cost per unit is $10. Fixed costs are $600,000. What is the breakeven point in units?

Answer 1

40,000 units

Step-by-step explanation:

Breakeven point (Unit) = Fixed cost / Contribution margin per unit

Contribution margin: Sale price - Variable cost

Contribution margin: 25 - 10 = $15

Breakeven point: $600,000 / 15

Breakeven point: 40,000