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 Mar 02, 2021

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

Expert Solution

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

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