A Producer with Only One Product Has Total Fixed Costs

Multiple Choice

A producer with only one product has total fixed costs of $15,000 per month. In addition, it cost the producer $100 in variable costs to produce each unit of his product (raw materials and direct labor cost) . The producer charges his wholesalers $125 per unit. How many units of the product does the producer have to sell each month in order to break even?

A) 450 units
B) 500 units
C) 550 units
D) 600 units
E) 650 units