Asked by
Amerhamzah Malawi
on Dec 16, 2024
Verified
If fixed costs are $600,000 and the unit contribution margin is $40, what is the break-even point if fixed costs are increased by $90,000?
A) 17,250
B) 15,000
C) 8,333
D) 9,667
Contribution Margin
The difference between sales revenue and variable costs, indicating how much of the revenue contributes to covering fixed costs and generating profit.
Fixed Costs
Costs that do not change with the level of production or sales, such as rent and insurance.
- Assess the level at which total costs equal total revenues, in units and dollars, across different price and cost scenarios.
- Explore the ramifications of transforming fixed liabilities, variable liabilities, and the asking price on break-even thresholds.
Verified Answer
CJ
Learning Objectives
- Assess the level at which total costs equal total revenues, in units and dollars, across different price and cost scenarios.
- Explore the ramifications of transforming fixed liabilities, variable liabilities, and the asking price on break-even thresholds.