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Narchie sells a single product for $50. Variable costs are 60% of the selling price, and the company has fixed costs that amount to $400,000. Current sales total 16,000 units. Narchie: _ _ _ _A) will break-even by selling 20,000 units.B) will break-even by selling 13,333 units.C) will break-even by selling 8,000 units.D) will break-even by selling 1,000,000 units.E) cannot break-even because it loses money on every unit sold.

Respuesta :

letmeanswer

D) will break-even by selling 1,000,000 units.

E) cannot break-even because it loses money on every unit sold.

Explanation:

Two of the statements are applicable

Narchie:

  • Will break-even by selling 1,000,000 units.
  • Cannot break-even because it loses money on every unit sold.

The break-even point shall be calculated by dividing the gross fixed production costs by the product price per unit less the variable cost of production. Fixed costs are those that stay the same, irrespective of how many units are delivered.

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