JKE, Inc. has a break-even sales level of $10,000,000 and has fixed costs of $4,000,000 per year. The selling price
per unit is $200. What is the variable cost per unit?
What will be an ideal response?
At break-even S - VC = FC
$10,000,000 - VC = $4,000,000
VC = $6,000,000
Number of units sold = $10,000,000/$200 = 50,000 units
Variable cost per unit = $6,000,000/50,000 = $120.00
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