Question

Mauro Products distributes a single product, a woven basket whose selling price is $21 per unit and whose variable expense is $18 per unit. The company's monthly fixed expense is $5,100. 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.) 1,700 baskets 14 $ 1. Break-even point in unit sales 2. Break-even point in dollar sales 3. Break-even point in unit sales Break-even point in dollar sales baskets

hello please help, thank you in advanced

Answer 1

Req1

Given sales price =21

Virable expenses is =18

Fixed expenses is =5100

Contribution margine is sales price-virable expenses=3(21-18)

Break even sales in units = fixed cost/contribution margine per unit

=5100/3=1700units

Req2

Break even point in dollar sales =break even unit sales × sales price

=1700×21

=35700

Req3

If fixed cost increased by 600 the new fixed cost will be 5100+600=5700

Break even sales in units=fixed cost/contribution margine per unit

=5700/3

=1900units

Break even sales in dollars=Break even sales in units×Sales price

=1900×21

=39900