Answer:
Variable cost per unit is $4.6
Explanation:
The break even point is the amount of sales that allow to pay all the fixed costs (paying previously the variable costs). If the firm sells 25,000 units at $7 each, then total sales are 25,000*7=175,000. Fixed costs are 60,000, so variable costs are 175,000 - 60,000 = 115,000 (because it is at its break even point). Then, if total variable costs are 115,000, per unit it will be 115,000/25,000 units = 4.6.
