Fixed Costs Are $1,500,000 and the Contribution Margin Per Unit

question 120

Multiple Choice

Fixed costs are $1,500,000 and the contribution margin per unit is $150. What is the break-even point?

• A) $3,750,000
• B) $10,000,000
• C) 3,750 units
• D) 10,000 units

---

Definitions:

Income Tax Expense

The total amount of income tax a company is obligated to pay to the government, reported on its income statement.

Investing Activities

Financial actions that involve the purchase of long-term assets, securities, or other investments to generate future income or value.

Sale of Equipment

The process of disposing or selling a company's equipment assets, which may result in a gain or loss reflected in the income statement.

Direct Method

A method of presenting the cash flow statement where cash receipts and cash payments from operating activities are disclosed, offering a clearer understanding of cash flows.