Question

Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales Variable expenses $ 26,000 14,000 Contribution margin Fixed expenses 12,898 7,800 Net operating income $ 4,200 9. What is the break-even point in dollar sales? (Round intermediate calculations to 4 decimal places. Round your answer to the nearest doller amount.)

Answer 1

Answer:
Sale price per unit               = Sales / Sales Volume               =    $ 26,000 / 1,000 Units	$ 26
Contribution margin per unit               = Contribution margin / Sales Volume               =    $ 12,000 / 1,000 Units	$ 12 per Unit
Break Even point (in Units )                   = Fixed expenses / Contribution margin per unit                   =     $ 7,800 / $ 12	650 Units
Break Even point in dollars                   = Break Even point (in Units ) x Sale price per unit                   =     650 units x $ 26	$ 16,900