What would be the breakeven point in dollars if total fixed costs were $300, the average variable costs were $9, and the price per unit was $18?

A) $16
B) $33
C) $400
D) $600

Question

What would be the breakeven point in dollars if total fixed costs were $300, the average variable costs were $9, and the price per unit was $18?A)  $16B)  $33C)  $400D)  $600

Shelbi Chambers · Accepted Answer

Final Answer : D, Explanation :  The breakeven point in dollars is calculated by dividing the total fixed costs by the contribution margin per unit, where the contribution margin per unit is the price per unit minus the average variable costs. Here, the contribution margin per unit is $18 - $9 = $9. Therefore, the breakeven point is $300 / $9 = $33.33 per unit. However, to find the breakeven point in dollars, we multiply the breakeven point in units by the price per unit: $33.33 units * $18 = $600.

What would be the breakeven point in dollars if total fixed costs were $300, the average variable costs were $9, and the price per unit was $18?

A) $16
B) $33
C) $400
D) $600

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