Mauro Products distributes a single product, a woven basket whose selling price is $21 per unit and whose variable expense is $16 per unit. The company’s monthly fixed expense is $6,500.
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.)
Break-even point = Fixed expenses/Unit Contribution margin | ||||
1 | Break-even point in unit sales | 1300 | baskets | =6500/(21-16) |
2 | Break-even point in dollar sales | 27300 | =1300*21 | |
3 | Break-even point in unit sales | 1420 | baskets | =(6500+600)/(21-16) |
Break-even point in dollar sales | 29820 | =1420*21 |
Mauro Products distributes a single product, a woven basket whose selling price is $21 per unit...
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