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CIPS Exam L3M3 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

Inability to touch something.

Services are intangible, which may present challenges when specifying / buying.


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

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Cyndy
1 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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Alberto
1 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
11 days 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
16 days ago
D) 13,333
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Garry
22 days ago
C) 400,000
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Pamela
28 days ago
B) 133,333
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Gilberto
1 months ago
A) 4 million
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Norah
2 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
2 days 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
3 days ago
D) 13,333
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Hassie
13 days ago
C) 400,000
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Kyoko
15 days ago
B) 133,333
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Kaycee
28 days ago
A) 4 million
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Ashlee
2 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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Sherron
28 days ago
Yeah, I agree. 13,333 bottles sounds more reasonable than 4 million.
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Crissy
1 months ago
I think you're right, 'D' seems like the correct answer.
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Elise
2 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
12 days ago
Exactly, it's a simple calculation to find the breakeven point.
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Cordelia
14 days ago
So, we just divide the fixed costs by the contribution margin per unit.
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Marjory
17 days ago
That's correct, we need to cover the fixed costs of $100,000.
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Venita
1 months ago
I think the answer is 133,333 bottles.
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Francoise
2 months ago
I'm not sure about this. Maybe we should calculate the breakeven point to be sure.
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Laurene
2 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
2 months ago
I think the answer is B) 133,333.
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