L&M Manufacturing Produces a Single Product That Sells for $16

Multiple Choice

L&M Manufacturing produces a single product that sells for $16. Variable (flexible) costs per unit equal $11.20. The company expects the total fixed (capacity-related) costs to be $7,200 for the next month at the projected sales level of 20,000 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately.
-What is the current break-even point in terms of number of units for the next month?

A) 1,500 units
B) 2,250 units
C) 3,333 units
D) None of the above is correct.