Breakeven revenue calculation: If fixed costs are 40,000, contribution per unit is 8, and selling price per unit is 20, what is the breakeven revenue?

Breakeven revenue calculation: If fixed costs are 40,000, contribution per unit is 8, and selling price per unit is 20, what is the breakeven revenue?

• A. 320,000
• B. 100,000
• C. 10,000
• D. 80,000

Answer: (C)

Breakeven occurs when the total contribution from sales just covers fixed costs. The contribution per unit is 8, so the number of units needed to break even is fixed costs divided by contribution per unit: 40,000 / 8 = 5,000 units. To get revenue at that point, multiply units by the selling price per unit: 5,000 × 20 = 100,000. So the breakeven revenue is 100,000.

Breakeven occurs when the total contribution from sales just covers fixed costs. The contribution per unit is 8, so the number of units needed to break even is fixed costs divided by contribution per unit: 40,000 / 8 = 5,000 units. To get revenue at that point, multiply units by the selling price per unit: 5,000 × 20 = 100,000. So the breakeven revenue is 100,000.