If the contribution margin per unit is $700 per unit and the break-even per unit is $40, then the fixed cost would be _____________?
Correct answer: B. $28,000
- A. $35,000
- B. $28,000
- C. $17,500
- D. $82,000
Explanation
Fixed cost at break-even equals contribution margin per unit multiplied by break-even units: $700 × 40 = $28,000. The wording likely uses “break-even per unit” to mean 40 break-even units.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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