Question

Craylon Manufacturing produces a single product that sells for $100. Variable costs per unit equal $25. The company expects total fixed costs to be $60,000 for the next month at the projected sales level of 1,000 units. the breakeven point in units is
Select one:
a. 200 units
• b. 800 units
c. 900 units
d. 110 units

Answer 1

The breakeven point in units can be calculated using the formula:
Breakeven Point (in units) = Fixed Costs / (Selling Price per unit - Variable Costs per unit)
Given:
Fixed Costs = $60,000
Selling Price per unit = $100
Variable Costs per unit = $25
Breakeven Point (in units) = $60,000 / ($100 - $25) = 800 units
Therefore, the correct answer is:
b. 800 units