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Multiple Choice

A company has fixed costs of $900 and a per-unit contribution margin of $3. Which of the following statements is (are) true?

A. Each unit "contributes" $3 toward covering the fixed costs of $900.
B. The situation described is not possible and there must be an error.
C. Once the break-even point is reached, the company will make money at the rate of $3 per unit.
D. The firm will definately lose money in this situation.
E. Statements "A" and "C" are true.

Solution Summary

The solution explains one multiple choice question relating to breakeven