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Homework answers / question archive / If the selling price per unit is $100, total fixed expenses are $600,000, and the breakeven sales in dollars is $800,000, what is the variable expense per unit? A) $33

If the selling price per unit is $100, total fixed expenses are $600,000, and the breakeven sales in dollars is $800,000, what is the variable expense per unit? A) $33

Accounting

If the selling price per unit is $100, total fixed expenses are $600,000, and the breakeven sales in dollars is $800,000, what is the variable expense per unit?

A) $33.33

B) $175.00

C) $75.00

D) $25.00

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Answer:  D

Explanation:  D)

Fixed Expenses $600,000 / Contribution Margin Ratio (x) = $800,000 BE Sales

X = 75%

Sales $100 × 75% = $75 Contribution Margin

Sales                                                      $100

Less Contribution Margin                   75

= Variable expense                              $25