If fixed costs are $400,000 and the unit contribution margin is $20, what amount of units must be sold in order to have a zero profit?

A) 25,000 units
B) 10,000 units
C) 400,000 units
D) 20,000 units

Zero Profit

A situation where a business or investment generates no profit but also doesn’t incur a loss, essentially breaking even.

Unit Contribution Margin

The difference between the selling price of a product and its variable costs.

Fixed Costs

Expenses that do not fluctuate with changes in production level or sales volume, such as rent, salaries, and insurance.