Question

Exercise 5-6 Break-Even Analysis (LO5-5] Mauro Products distributes a single product, a woven basket whose selling price is $15 per unit and whose variable expense is $12 per unit. The company's monthly fixed expense is $4,200. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? baskets | 1. Break-even point in unit sales 2. Break-even point in dollar sales Break-even point in unit sales Break-even point in dollar sales baskets

Answer 1

15.00 12.00 4200 15 12 Selling Price Per unit Varaibel Expense Per unit Fixed Expenses Compute the CM ratio and Varaible Expense ratio Selling Price Per unit Varaibel Expense Per unit Contribution Margin per unit (Selling Price - Varible Cost) CM Ratio =( CM/Selling Price) Answers 1 Break Even in Unit Sales =Fixed Cost / selling price - Variablecost) | 2 Brake Even in Dollar sales =(selling Price* Bep Units) 3 Break Even Ipoint in Units =(4200+600)/3 4 Break Even Poin in Dollars =1600*15 20% 1400 21000 1600 24000 120.00 80.00 50000 Selling Price Per unit Varaibel Expense Per unit Fixed Expenses Compute the CM ratio and Varaible Expense ratio Selling Price Per unit Varaibel Expense Per unit Contribution Margin per unit (Selling Price - Varible Cost) CM Ratio =(CM/Selling Price) Answers Unit Needed =(50000+10000)/40 Dollars Needed= (50000+15000)/33% 120 80 40 33% 1500 195000