A Company Has Total Fixed Cost of $120,000

question 223

Multiple Choice

A company has total fixed cost of $120,000. Its variable cost per unit is $2.00 and its price per unit is $3.50. The break-even point in units is:

• A) 60,000.
• B) 80,000.
• C) 34,286.
• D) 21,818.
• E) Cannot be determined from the information provided.

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Definitions:

Rationalize Denominator

The process of eliminating a square root or imaginary number from the denominator of a fraction.

Square Root

A quantity which, when squared, returns the original number.

Rationalize Denominator

The process of eliminating radicals or complex numbers from the denominator of an algebraic fraction by multiplying both the numerator and the denominator by a suitable value.

Cube Root

The value that when multiplied by itself three times gives the original number.