Question

Mauro Products distributes a single product, a woven basket whose selling price is $29 per unit and whose variable expense is $22 per unit. The company's monthly fixed expense is $16,100. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.) & Answer is complete but not entirely correct. 1. baskets 2,300 3,886 X $ Break-even point in unit sales Break-even point in dollar sales Break-even point in unit sales Break-even point in dollar sales 2,386 baskets $ 4,031 X

Answer 1

Solution

1	Breakeven point in unit sales	2300	Baskets
2	Breakeven point in dollars sales	$ 66,700
3	Breakeven point in unit sales	2386	Baskets
	Breakeven point in dollars sales	$ 69,186

Working

A	Sale Price per unit	$                  29.00
B	Variable Cost per Unit (87+22)	$                  22.00
C=A x B	Unit Contribution	$                    7.00
D	Total Fixed cost	$          16,100.00
E=D/C	Breakeven point in units	2300.00
F= E x A	Breakeven in sales dollars	$          66,700.00

Requirement 3 working

A	Sale Price per unit	$              29.00
B	Variable Cost per Unit (87+22)	$              22.00
C=A x B	Unit Contribution	$                7.00
D	Total Fixed cost	$      16,700.00
E=D/C	Breakeven point in units	2385.71
F= E x A	Breakeven in sales dollars	$      69,185.71