For fixed cost of $1,000, revenue (price) per unit of $1, & variable cost per unit of $0.80, the break-even is

Question

what could the answer and why?
a) 1,000 units
b) 1,250
c)2,250
d)5,000
e) none of these

Answer 1

Basic maths .. if you don't understand the question, switch to 'media studies' or some such ..

Variable costs are 80c. That means you are making 20c 'profit' on each unit.

To make a whole Dollar profit you have to sell 5 units (5 x 20cents = 1 $).

To make $1000 you have to sell 5000 units ... ... so the answer is (d) .. (because to break even you have to cover the fixed costs of $1000)