For fixed costs of $2,000, revenue per unit of $2, and variable cost per unit of $1.60, the break-even quantity is:

Break even in units = 5000 units

Explanation:

Break even quantity or break even in units is the quantity of units that must be sold in order for the company to break even. Break even is a situation where the total revenue of the business equals its total costs and there is a situation of no profit and no loss.

The formula to calculate break even quantity is,

Break even in units = Fixed costs / Contribution margin per unit

Where,

Contribution margin per unit = Selling price per unit - Variable cost per unit

Contribution margin per unit = 2 - 1.6  =  $0.4

Break even in units = 2000 / 0.4

Break even in units = 5000 units

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