Newham Corporation produces and sells two products. In the most recent month, Product R10L had sales of $23,000 and variable expenses of $10,070. Product X96N had sales of $36,000 and variable expenses of $17,660. The fixed expenses of the entire company were $45,980. The break-even point for the entire company is closest to:
compute break even point for entrie company
Particular |
product R10L |
Product X96N |
Total |
Sales | $23000 | $36000 | $59000 |
(-) variable expenses | ($10070) | ($17660) | ($27730) |
CONTRIBUTION | $12930 | $18340 | $31270 |
CONTRIBUTION MARGIN ratio=CONTRIBUTION/sales×100 | $12930/$23000×100=56% | $18340/$36000×100=51% | 53% |
Fixed expenses | $45980 |
break even point for entrie company= fixed expenses/CONTRIBUTION MARGIN ratio
=$45980/53%=$86755
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