If Fixed Costs Are $500,000 and the Unit Contribution Margin

question 212

Multiple Choice

If fixed costs are $500,000 and the unit contribution margin is $20, what is the break-even point in units if fixed costs are reduced by $80,000?

• A) 25,000
• B) 29,000
• C) 4,000
• D) 21,000

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Definitions:

Linear Association

A relationship between two variables where the change in one variable is proportionally related to a change in the other variable.

Positive Association

A relationship between two variables where an increase in one variable is associated with an increase in the other.

Explanatory

Term used in statistical analysis to describe a variable that is being used to predict or explain changes in another variable.

Response

The answer or reaction to a question or situation, often gathered in surveys, interviews, or experiments as data for analysis.