Apex Companys fixed costs equal 150000 its variable cost rat
Apex Company\'s fixed costs equal $150,000, its variable cost ratio is 60%, and its variable costs are $4.50 per unit. Given this information, what is the break-even point in units (rounded)?
a. $49,000 b. $50,000, c. $51,000, d. $52,000
Solution
b. 50,000 units
Selling price = $4.50 / 0.60 = $7.50
Contribution margin per unit = $7.50 - $4.50 = $3.00
Break-even point in units = $150,000 / $3.00 = 50,000 units
