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RST Company produces a product that has a variable cost of $6 per unit. The company's fixed costs are $30,000. The product sells for $10 per unit. How many units must be produced to break-even?

Respuesta :

Answer:

7,500 units

Explanation:

Given that,

Variable cost = $6 per unit

Fixed costs = $30,000

Selling price of the product = $10 per unit

Contribution margin per unit:

= Selling price per unit - Variable cost per unit

= $10 - $6

= $4

Break-even units:

= Fixed costs ÷ Contribution margin per unit

= $30,000 ÷ $4

= 7,500 units

Therefore,

7,500 units must be produced to break-even.

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