ITPEC IP October 2025 Question 72
ITPEC IP October 2025 — Question 72 of 100
At least 6,000 units must be sold — divide fixed cost by the contribution margin per unit at the new price.
The contribution margin is selling price minus variable cost: 800 − 700 = 100 yen per unit. This margin must cover the monthly fixed cost of 600,000 yen, so the break-even quantity is 600,000 ÷ 100 = 6,000 units. Selling fewer would leave part of the fixed cost uncovered.
Answer (d)
Why not others:
- (a) 2,400 and (b) 2,500 do not generate enough contribution margin
- (c) 4,800 contributes only 480,000 yen, still 120,000 below fixed cost
Key rule: Break-even quantity is fixed cost ÷ (unit price − unit variable cost); a price reduction can sharply increase the required volume.
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