Moyas Corporation sells a single product for $20 per unit. Last year, the company's sales revenue was $300,000 and its net operating income was $24,000. If fixed expenses totaled $96,000 for the year, the break-even point in unit sales was: Multiple Choice

the break even point in unit sales is 12,000 units

Explanation:

The computation of the break even point in sales is shown below;

But before that following calculations need to be done

Sales revenue $300000  

Less: Fixed expenses $96,000

Less: Net operating income $24,000

Variable expenses $180,000

Units sold = $300,000 ÷ $20 = 15,000 units

Variable cost per unit

= $180,000 ÷ 15,000 units

= $12

Now the break even point in unit sales is

= Fixed cost ÷ contribution margin per unit

= $96,000 ÷ ($20 - $12)

= $96,000 ÷ 8

= 12,000 units

hence, the break even point in unit sales is 12,000 units

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