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f the breakeven point is 20,000 and the contribution margin is $1.30, how much are fixed costs?Multiple choice question.20,000$15,384$26,000

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f the breakeven point is 20,000 and the contribution margin is 1.30,howmucharefixedcosts?Multiplechoicequestion.20,0001.30, how much are fixed costs?Multiple choice question.20,00015,384$26,000

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Solution

The breakeven point is the point at which total revenue equals total costs, meaning the business is not making a profit or a loss.

The formula to calculate the breakeven point in units is:

Breakeven Point in Units = Fixed Costs / Contribution Margin per Unit

Given that the breakeven point is 20,000 units and the contribution margin per unit is $1.30, we can rearrange the formula to find the fixed costs:

Fixed Costs = Breakeven Point in Units * Contribution Margin per Unit

Substituting the given values:

Fixed Costs = 20,000 * 1.30=1.30 = 26,000

Therefore, the fixed costs are $26,000.

This problem has been solved

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