Calculate fixed costs using break-even point and contribution margin Steps:

• Selling price per unit = variable cost per unit / (1 - contribution ratio) = $27 / (1 - 0.40) =$27 / 0.60 = $45.
• Contribution per unit = selling price per unit × contribution ratio = $45 × 0.40 =$18.
• Alternatively, contribution per unit = selling price - variable cost = $45 -$27 = $18.
• Total fixed cost = break-even units × contribution per unit = 500 × $18 =$9,000.

Why C is correct:

• Fixed costs equal break-even units times contribution per unit per the break-even formula: FC = BEP × (SP - VC).

Why the others are wrong:

• A: Underestimates by using incorrect contribution per unit, e.g., $8 instead of$18.
• B: Results from miscalculating selling price as $50, yielding contribution of$20.
• D: Overestimates by assuming contribution per unit of $30, ignoring the 40% ratio.

Final answer: C