How is the breakeven point in units calculated?

The breakeven point in units is calculated by dividing total fixed costs by the contribution margin per unit, which is the difference between the selling price per unit and the variable cost per unit. This formula reflects how many units must be sold to cover all fixed costs, with each sold unit contributing to offsetting these costs by the amount of the contribution margin.

In this context, the calculation focuses on understanding that fixed costs are the total costs that do not change with the level of production or sales, while the contribution margin per unit represents the amount each unit contributes to covering those fixed costs. By using the correct formula, you effectively determine the minimum quantity of goods that need to be sold to achieve a zero profit or loss status, which is critical for business planning and decision-making.

The other choices do not accurately represent the concept of breakeven calculation, emphasizing a misunderstanding of the relationship between fixed costs, variable costs, and selling price in the context of determining the breakeven point.