Answer:
As per the information given in the question; | |
Fixed Expenses = $11,200 | |
Selling price per unit = $26 | |
Variable cost per unit = $22 | |
Thus Contribution per unit (26-22) = $4 | |
1 | Formula of break-even point in sales($) = Fixed expenses / Contribution per unit |
Thus break-even point in unit sales = $11,200 / 4 = 2800 units | |
2 | P/V ratio=(Contribution per unit / Selling price per unit )*100 |
=4/26*100 = 15.3846% | |
Formula of break-even point in sales($) = Fixed expenses / P/V ratio | |
=11,200/15.3846% | |
= $72,800 | |
3 | Formula of break-even point in sales($) = Fixed expenses / P/V ratio |
=(11,200+600)/15.3846% | |
= $76,700 | |
Formula of break-even point in sales($) = Fixed expenses / Contribution per unit | |
Thus break-even point in unit sales = $11,800 / 4 = 2950 units |
Mauro Products distributes a single product, a woven basket whose selling price is $26 per unit...
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