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CIPS L3M3 Exam - Topic 2 Question 29 Discussion

Actual exam question for CIPS's L3M3 exam
Question #: 29
Topic #: 2
[All L3M3 Questions]

The variable cost of a bottle of water is 25 cents. Selling price is $1, and fixed costs are one hundred thousand dollars. How many bottles of water must be sold to reach breakeven point?

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Suggested Answer: D

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by Cyndy at Jan 25, 2025, 08:26 AM

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Denna
3 months ago
Yup, simple math, just subtract the costs from the selling price!
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Olive
3 months ago
Fixed costs are $100,000, variable cost is $0.25.
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Shawnda
3 months ago
Wait, are you sure about that number? Seems high!
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Kara
4 months ago
Totally agree, that math checks out.
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Wilda
4 months ago
Gotta sell 133,333 bottles to break even!
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Glendora
4 months ago
I’m confused about the numbers. I thought breakeven was always a straightforward calculation, but I’m not sure if I got the right formula for this one.
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Kiera
4 months ago
I feel like I might be overthinking this. If the variable cost is 25 cents and the selling price is $1, that gives us a contribution margin of 75 cents, right?
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Arlene
4 months ago
I remember a similar question where we had to calculate the breakeven point, and I think it was about fixed costs divided by the selling price minus variable costs.
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Wynell
5 months ago
I think the breakeven point is calculated by dividing fixed costs by the contribution margin, but I'm not entirely sure how to find that margin here.
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Joye
5 months ago
This looks like a classic breakeven analysis problem. I'm pretty confident I can solve this. I just need to remember the formula and plug in the numbers correctly. No need to overthink it, just focus on the key information given in the question.
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Renato
5 months ago
Okay, I think I've got this. The breakeven point is where total revenue equals total costs, right? So we need to find the number of bottles where the revenue ($1 per bottle) equals the variable costs (25 cents per bottle) plus the fixed costs ($100,000). I'm going to give this a try.
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Rodrigo
5 months ago
I'm a bit confused on how to approach this. Do I need to set up an equation and solve for the number of bottles? Or is there a more direct way to calculate the breakeven point? I want to make sure I understand the concept before trying to solve the problem.
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Paris
5 months ago
Hmm, this seems straightforward enough. I just need to figure out the formula for the breakeven point and plug in the numbers. I think it's something like total revenue = total costs, but I'll have to double-check the exact equation.
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Alaine
5 months ago
Okay, let's think this through step-by-step. The variable cost is 25 cents per bottle, the selling price is $1, and the fixed costs are $100,000. To reach the breakeven point, the total revenue must equal the total costs, so we need to find the number of bottles that would make the revenue equal the costs.
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Cyndy
9 months ago
This question is as clear as a bottle of Evian. I'm just going to go with 'D' and hope the Water Lords are on my side today.
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Rose
8 months ago
I agree with you, D) 13,333 seems like the right choice.
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Elza
8 months ago
I'm going with C) 400,000.
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Fabiola
8 months ago
I think the answer is B) 133,333.
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Alberto
10 months ago
Alright, time to put on my business cap. Okay, so we need to cover the fixed costs of $100,000, and the contribution margin per bottle is 75 cents. Divide the fixed costs by the contribution margin, and voila - 'B' is the correct answer!
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Ty
9 months ago
Alright, time to put on my business cap. Okay, so we need to cover the fixed costs of $100,000, and the contribution margin per bottle is 75 cents. Divide the fixed costs by the contribution margin, and voila - 'B' is the correct answer!
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Theresia
9 months ago
D) 13,333
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Garry
9 months ago
C) 400,000
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Pamela
9 months ago
B) 133,333
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Gilberto
9 months ago
A) 4 million
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Norah
10 months ago
Hmm, let me think this through. The variable cost is 25 cents, the selling price is $1, and the fixed costs are $100,000. Yep, the answer is 'B' - 133,333 bottles. I've got this in the bag!
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Peggie
8 months ago
Hmm, let me think this through. The variable cost is 25 cents, the selling price is $1, and the fixed costs are $100,000. Yep, the answer is 'B' - 133,333 bottles. I've got this in the bag!
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Gail
8 months ago
D) 13,333
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Hassie
9 months ago
C) 400,000
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Kyoko
9 months ago
B) 133,333
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Kaycee
9 months ago
A) 4 million
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Ashlee
10 months ago
Wait, wait, wait... 4 million bottles? This must be a trick question. I'm pretty sure the answer is 'D' - 13,333 bottles to break even. If I'm wrong, I'll just drown my sorrows in a bottle of water.
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Graciela
8 months ago
Great, we all seem to be on the same page then. 'D' it is!
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Felix
8 months ago
I'm going with 'D' as well. It just makes more sense.
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Sherron
9 months ago
Yeah, I agree. 13,333 bottles sounds more reasonable than 4 million.
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Crissy
10 months ago
I think you're right, 'D' seems like the correct answer.
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Elise
11 months ago
Ah, the old breakeven point calculation. Let's see, if the variable cost is 25 cents and the selling price is $1, we need to cover the fixed costs of $100,000, so the answer must be 133,333 bottles. Easy peasy!
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Salley
9 months ago
Exactly, it's a simple calculation to find the breakeven point.
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Cordelia
9 months ago
So, we just divide the fixed costs by the contribution margin per unit.
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Marjory
9 months ago
That's correct, we need to cover the fixed costs of $100,000.
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Venita
10 months ago
I think the answer is 133,333 bottles.
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Francoise
11 months ago
I'm not sure about this. Maybe we should calculate the breakeven point to be sure.
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Laurene
11 months ago
I agree with Sang. The fixed costs are high, so it makes sense that we need to sell a significant number of bottles to break even.
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Sang
11 months ago
I think the answer is B) 133,333.
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