Determine the Breakeven Point in Units Based on the Following

question 142

Multiple Choice

Determine the breakeven point in units based on the following information: Assume a constant mix of 3 units of Small for every 1 unit of Large.Total fixed costs: $48,000

• A)4,800 units of Small and 1,600 units of Large.
• B)1,200 units of Small and 400 units of Large.
• C)1,600 units of Small and 4,800 units of Large.
• D)8,000 units of Small and 2,667 units of Large.
• E)1,600 units of Small and 1,600 units of Large.

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Definitions:

Break-Even

The point at which total costs and total revenue are equal, meaning there is no net loss or gain, and the business or investment is self-sustaining.

Maximize Profits

A strategy or goal where a firm or individual seeks to achieve the highest possible profit from its operations.

Peak Efficiency

The state of operation in which a system or process achieves its maximum output with the lowest input, often ideal in terms of productivity.

Perfectly Competitive Firm

A company that operates in a market where there are many sellers and buyers, the product is homogeneous, and there is free entry and exit from the market.