The contribution margin per unit is $500 per unit and the breakeven per unit is $35, then the fixed cost would be ___________?
Correct answer: D. $17,500Finance
- A. $13,500
- B. $14,280
- C. $18,500
- D. $17,500Finance
Explanation
At the break-even point, fixed cost equals contribution margin per unit multiplied by break-even units: $500 × 35 = $17,500. The wording should say 35 break-even units rather than “breakeven per unit.”
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
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.
Practise Cost Accounting
941 free Cost Accounting MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Accounting questions like this
Accounting is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Cost Accounting questions
In the process of examining, occurred changes in total revenues, operating income and costs is known as _____________?
If the contribution per unit is $900 and the number of units sold is $70, then the contribution margin will be _____________?
If the contribution margin per unit is $1000 and the contribution margin percentage is 25%, then the selling price would be ____________?
In cost-plus pricing, the 'plus' refers to a component named as ___________?
The product costing technique in which markup component is added into cost base, to set a target price is known as __________?
The process which leads to disassembling and analysis of competitors, operating activities to become acquainted with competitors' technologies is called ___________?