Mauro Products distributes a single product, a woven basket whose selling price is $30 per unit and whose variable expense is $25 per unit. The company’s monthly fixed expense is $12,500. 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.)
Mauro Products distributes a single product, a woven basket whose selling price is $30 per unit and whose variable expense is $25 per unit. The company’s monthly fixed expense is $12,500.
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.)
Mauro Products distributes a single product, a woven basket whose selling price is $30 per unit and whose variable expense is $25 per unit. The company’s monthly fixed expense is $12,500.
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.)
Selling price per unit = $30
Variable cost per unit = $25
Contribution margin per unit = $30 - $25 = $5
Fixed expense = $12,500
1). Breakeven point in units = Fixed expenses / Contribution
margin per unit
= $12,500 / $5
= 2500 units
2). Breakeven point in dollar slaes = Breakeven units * Selling
price
= 2500 * $30
= $75,000
3). If fixed expenses increase by $600.
Breakeven point in units = ($12500 + $600) / $5
= 2620 units
Breakeven point in dollar slaes = 2620 * $30
= $78,600
Mauro Products distributes a single product, a woven basket whose selling price is $30 per unit...
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