Management Insists That a Purchase Be Made Only If the Break-Even

Multiple Choice

Management insists that a purchase be made only if the break-even point for the purchase is at least 500 units. If the fixed cost is $600 and variable cost per unit is $3, what is the selling price that should be set to exactly achieve this break-even point?

A) $4.20
B) $5.00
C) $6.00
D) Cannot be determined from the information given