Answer:
a. $8 b. $1,394,000
Explanation:
The contribution margin per unit of a product is $17.
The price per unit is $25.
The break-even point is 82,000 units.
a. Contribution margin per unit = Sales per unit - AVC
$17 = $25 - AVC
AVC = $25 - $17
AVC = $8
So, the variable cost per unit is $8.
b. Fixed costs
= [tex]Breakeven\ in\ units\times Contribution\ margin\ in\ units[/tex]
= [tex]82,000\times 17[/tex]
= $1,394,000
