Break-even point = fixed costs ÷ contribution per unit

Steps:

• Calculate contribution per unit: revenue ($500) minus variable costs ($290) = $210.
• Identify total fixed overheads as $9,450 for the month.
• Divide fixed costs by contribution per unit: $9,450 ÷$210 = 45 units.
• At 45 units, total revenue equals total costs, so no profit or loss.

Why A is correct:

• Matches the formula for break-even units, where contribution covers fixed costs exactly.

Why the others are wrong:

• B. Underestimates contribution or overstates fixed costs (e.g., $12,810 ÷$210 = 61).
• C. Common error adding fixed to variable costs, yielding lower margin ($9,450 ÷$107 ≈ 88).
• D. Ignores variable costs, using fixed ÷ revenue ($9,450 ÷$59 ≈ 160, misapplied).

Final answer: A