Answer (C) is correct . The breakeven point in units equals total fixed costs divided by the unit contribution margin. The unit contribution margin is $20 ($36 selling price – $16 unit variable cost). Hence, the breakeven point is 22,500 units ($450,000 ÷ $20).
Answer (A) is incorrect because This figure excludes the $1.50 of variable selling expenses from the unit contribution margin.
Answer (B) is incorrect because This figure excludes the $1.50 of variable selling expenses from the unit contribution margin and the depreciation from the fixed costs.
Answer (D) is incorrect because This figure adds the $60,000 of depreciation to the fixed costs.
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The number of units of the new product that Delphi Company must sell during the next fiscal year in order to break even is
