The BEP, in Units, Can Be Found by Dividing

question 162

Multiple Choice

The BEP, in units, can be found by dividing

• A) total fixed costs by the fixed cost contribution per unit.
• B) total variable costs by the variable cost contribution per unit.
• C) total variable costs by the fixed cost contribution per unit.
• D) the assumed selling price per unit by the variable cost per unit.
• E) total variable costs by total fixed costs.

---

Definitions:

Materials Markup

A pricing method where a percentage is added to the cost of materials to cover overhead and profit.

Markup Percentage

A measure of how much the price of a product or service is increased over its cost to the seller, expressed as a percentage of the cost.

Variable Product Cost

Expenses that fluctuate in direct proportion to the amount of output produced, including direct labor and raw materials.

Fixed Costs

Expenses that do not change with the level of production or sales, including rent, salaries, and insurance, providing contrast to variable costs.