Question

the elevator pitch math quiz
question 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?
a) 923
b) 972
c) 1,112
d) 1,280

Explanation:

Step1: Recall break - even formula

The break - even sales volume formula is $Q=\frac{Fixed\ Costs}{Gross\ Margin\ per\ Unit}$, where $Q$ is the break - even sales volume, Fixed Costs are the total fixed expenses, and Gross Margin per Unit is the profit per unit before variable costs are considered.

Step2: Identify values

The fixed costs are $50000$ and the gross margin per unit is $45$.

Step3: Calculate break - even volume

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

Answer:

C. 1,112