If Fixed Costs Are $100,000 and Weighted-Average Unit Contribution Margin

question 31

True/False

If fixed costs are $100,000 and weighted-average unit contribution margin is $50, then the break-even point in units is 2,000 units.

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Definitions:

Month

A unit of time, roughly based on the period of the Moon's orbit around Earth, traditionally used to measure durations of approximately 30 days.

Break Even

The point at which total costs and total revenue are equal, resulting in no net loss or gain.

Variable Cost

Costs that vary directly with the level of production or sales volume, such as materials and labor.

Fixed Costs

Costs that do not change with the amount of goods or services produced, such as rent, salaries, and insurance.