the elevator pitch math quiz\nquestion 4 of 10: you are evaluating a pitch, and the founder says his product…

the elevator pitch math quiz\nquestion 4 of 10: you are evaluating a pitch, and the founder says his product has a gross margin of $45 per unit and he has fixed expenses of $50,000. what is his break - even sales volume?\n a) 923\n b) 972\n c) 1,112\n d) 1,280

the elevator pitch math quiz\nquestion 4 of 10: you are evaluating a pitch, and the founder says his product has a gross margin of $45 per unit and he has fixed expenses of $50,000. what is his break - even sales volume?\n a) 923\n b) 972\n c) 1,112\n d) 1,280

Answer

Explanation:

Step1: Recall break - even formula

The break - even sales volume formula is $Q=\frac{FC}{CM}$, where $Q$ is the break - even quantity, $FC$ is the fixed cost, and $CM$ is the contribution margin (gross margin in this case).

Step2: Identify values

We know that $FC = 50000$ and $CM=45$.

Step3: Calculate break - even volume

$Q=\frac{50000}{45}=\frac{10000}{9}\approx1111.11$. Rounding up, we get 1112.

Answer:

c) 1,112