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Our company sells a product for $120 per unit. Variable costs are $90 per unit and fixed costs are $9,000. The company expects to sell 500 units this year. How many units must we sell to break even?Group of answer choices300320360400

Question

Our company sells a product for 120perunit.Variablecostsare120 per unit. Variable costs are 90 per unit and fixed costs are $9,000. The company expects to sell 500 units this year. How many units must we sell to break even?Group of answer choices300320360400

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Solution

To calculate the break-even point, we need to know how much profit is made per unit and how much the fixed costs are.

  1. First, calculate the profit per unit by subtracting the variable cost from the selling price. In this case, 120120 - 90 = $30 profit per unit.

  2. Next, divide the fixed costs by the profit per unit to find out how many units need to be sold to cover the fixed costs. In this case, 9,000/9,000 / 30 = 300 units.

So, the company needs to sell 300 units to break even.

This problem has been solved

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