Larsen Films' is analyzing its cost structure. Its fixed operating costs are $470,000, its variable costs of $2.80 per unit produced, and its products sell for $4.00 per unit. What is the company's breakeven point, i. e., at what unit sales volume would income equal costs? a. 453,403 b. 411,250 c. 476,073 d. 391,667 e. 431,813

d. 391,667

Explanation:

Contribution per unit = Selling price - Variable cost = $4 - $2.80 = $1.20

Break even point = Fixed cost ÷ Contribution per unit = $470,000 ÷ $1.20 = 391,667 units

Therefore, the company's breakeven point, i.e., the unit sales volume that would make income equal costs is 391,667 units.

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