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CIPS L3M3 Exam - Topic 4 Question 45 Discussion

Actual exam question for CIPS's L3M3 exam
Question #: 45
Topic #: 4
[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: B

The calculation which needs to be done is one hundred thousand (dollars) divided by the contribu-tion per bottle. The contribution per bottle is one dollar minus the variable cost - 25 cents. Thus the contribution is 75 cents. One hundred thousand divided by $0.75 = 133,333. Note the answer is in units - in response to the QUESTION NO : of how many bottles / units must be sold to break even.

For people who feel they have difficulty with calculations, just look at the possible answers. If the contribution is a bit less than a dollar, and the fixed costs are 100,000, we would expect the answer to be a number a little over 100,000 - one of the answers fits the bill, and this is the correct answer. So the QUESTION NO : may look complicated or difficult, but if you stay calm and think it through, it's not that difficult.


by Penney at Mar 04, 2026, 01:25 AM

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Hyun
15 days ago
Wait, are you sure about that? Seems high!
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Yuette
20 days ago
Definitely B) 133,333 bottles!
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Lina
26 days ago
Breakeven point is where total costs equal total revenue!
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Dyan
1 month ago
Really? 133,333 seems way too low for fixed costs that high.
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Felicidad
1 month ago
Gotta agree with B, simple math!
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Ria
1 month ago
Wait, how did you get that number? Sounds off.
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Carissa
2 months ago
No way, it's C) 400,000 for sure.
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Alison
2 months ago
It's definitely B) 133,333 bottles!
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Blair
2 months ago
I’m not confident about this one. I feel like I might have seen a question with a similar setup, but I can't recall the exact numbers.
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Aleisha
2 months ago
If the variable cost is 25 cents and the selling price is $1, the contribution margin should be 75 cents. I think that means we need to sell around 133,333 bottles to break even.
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Ashley
2 months ago
I remember a similar question where we had to find the breakeven point using variable and fixed costs. I think it was something like 133,000 bottles, but I could be mixing it up.
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Apolonia
2 months ago
I think the breakeven point is calculated by dividing fixed costs by the contribution margin, but I'm not completely sure how to find that margin here.
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