A Manufacturing Company Is Considering Producing a New Product

Multiple Choice

A manufacturing company is considering producing a new product. The variable cost of the new product is $60 per unit, and the total fixed costs are $75,000 for a month. The company could produce 1,500 units per month, and sell the product for $125 each. What is the break-even point as a percent of capacity?

A) 81.2%
B) 76.9%
C) 75%
D) 72.4%
E) 63%