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CIPS L3M3 Exam - Topic 2 Question 47 Discussion

A bottle of sparkling water sells for $1. The variable cost is 50 cents. Fixed costs for the business are $100,000 (one hundred thousand dollars). How many bottles of water must be sold for the business to reach breakeven point?
B) 200,000
A) 50,000
C) 20,000
D) 2 million

CIPS L3M3 Exam - Topic 2 Question 47 Discussion

Actual exam question for CIPS's L3M3 exam
Question #: 47
Topic #: 2
[All L3M3 Questions]

A bottle of sparkling water sells for $1. The variable cost is 50 cents. Fixed costs for the business are $100,000 (one hundred thousand dollars). How many bottles of water must be sold for the business to reach breakeven point?

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Suggested Answer: B

The 'contribution' (selling price minus variable cost) for each bottle is 50 cents. Divide the fixed costs by the contribution (100,000 / 0.5) = 200,000

If your textbook or tutor has not covered this type of calculation, don't worry; it is a difficult ques-tion and is unlikely to be a significant issue in the CIPS examination.


by Shala at Apr 10, 2026, 02:24 AM

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Cyndy
8 hours ago
Gotta sell 200,000 bottles to break even!
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Audry
6 days ago
How did they come up with that number?
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Lorean
11 days ago
Totally agree, B is the right choice!
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Beata
16 days ago
Wait, 200k? That seems way too high.
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Marsha
2 months ago
Definitely B, that makes sense.
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Bernardo
2 months ago
Gotta sell 200,000 bottles to break even!
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Germaine
3 months ago
I feel like I saw a similar question in our practice exam. If I recall correctly, it was about finding how many units to sell to cover fixed costs. I think it was around 200,000 bottles, but I need to double-check.
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Edna
3 months ago
I'm not entirely sure how to set up the equation for this. Is it just fixed costs divided by the contribution margin?
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Loren
3 months ago
I remember something about calculating contribution margin. If the selling price is $1 and the variable cost is $0.50, the contribution margin is $0.50 per bottle.
upvoted 0 times
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Mi
3 months ago
I think the breakeven point is where total revenue equals total costs, right? So we need to calculate that based on fixed and variable costs.
upvoted 0 times
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