Bricks, Inc. has just installed a factory for producing titanium-strengthened bricks. The fixed costs equal $1.25 million. The bricks can be sold at $2.25 per unit and cost $1.9 per unit in variable expenses. How many bricks must be sold by Bricks, Inc. for it to break even?
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A. B. C. D.Explanation
The break-even quantity, Q, is given by Q = FC/(P - V), where FC = total fixed costs, P = average sale price per unit and V = average variable cost per unit. In this case, Q = 1.25/(2.25 - 1.9) million = 3.57 million bricks.