When the fixed cost is divided into contribution margin per unit, it gives _________?
Correct answer: C. breakeven number of units
- A. fixed output
- B. variable output
- C. breakeven number of units
- D. total number of units
Explanation
At break-even, total contribution margin equals total fixed cost. Dividing fixed cost by contribution margin per unit therefore gives the number of units required to break even.
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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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