C is corrent. The breakeven volume is calculated as follows: Breakeven volume = Fixed costs ÷ (Price – Unit variable costs) = 450,000 ÷ ($25 – $15) = 450,000 ÷ ($10) = 45,000 units
A is incorrect. This answer is calculated with only price in the denominator, rather than price less unit variable costs, as follows: Breakeven volume = Fixed costs ÷ Price = 450,000 ÷ ($25) = 18,000 units
B is incorrect. This answer is calculated with only unit variable costs in the denominator rather than price less unit variable costs as follows: Breakeven volume = Fixed costs ÷ Unit variable costs = 450,000 ÷ ($15) = 30,000 units
D is incorrect. This answer is calculated by adding the $150,000 noncash outlays to the fixed production costs and dividing this amount by price less unit variable costs, as follows: Breakeven = (Fixed costs + Noncash outlays) ÷ (Price – Unit variable costs) volume = (450,000 + 150,000) ÷ ($25 – $15) = 600,000 ÷ ($10) = 60,000 units
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