Question

When Isaiah Company has fixed costs of $109,720 and the contribution margin is $26, the break-even point is a.4,220 units b.8,440 units c.12,720 units d.5,910 units

Answer 1

Answer:

a. 4,220 units

Explanation:

The break-even point occurs at the output level at which the total contribution of 'x' units sold equal Isaiah Company's ficed costs.

The number of units required to break-even, 'x' is:

$\ 109,720 = \ 26*x\\\\x= \frac{\ 109,720 }{\ 26}= 4,220\ units$

The break-even point is 4,220 units.