Question

Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to questi Mauro Products distributes a single product, a woven basket whose selling price is $24 per unit and whose variable expense is $17 per unit. The company's monthly fixed expense is $18,900. 2.85 points 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. baskets $ Break-even point in unit sales Break-even point in dollar sales Break-even point in unit sales Break-even point in dollar sales 2,700 46,097 X 2,786 64,071 % baskets $

Answer 1

Requirement: 1 Fixed cost 18900 Break-even-point (Units) Contribution margin per unit = | Break even point 7 2700 baskets Requirement: 2 : Fixed cost 18900 Break-even-point (Dollars) Contribution margin ratio = 0.291666667 Break even point (Dollars) 64800 Requirement: 3 Break-even-point (Units) Contribution margin per unit = Fixed cost 19500 Break even point 2786 | baskets Fixed cost 19500 Break-even-point (Dollars) Contribution margin ratio = | 0.291666667 Break even point (Dollars) 66857 = Contribution margin = Selling price - variable cost i.e $ 24 - $ 17= $7 Contribution margin ratio = Cotribution margin / sales i.e $7/ $24 = 0.291666667