Asked by Aleks Kirakosyan on Jun 03, 2024
Verified
Northern Pacific Fixtures Corporation sells a single product for $28 per unit.If variable expenses are 65% of sales and fixed expenses total $9,800, the break-even point is:
A) $15,077
B) $18,200
C) $9,800
D) $28,000
Break-Even Point
The point at which total costs and total revenues are equal, meaning there is no profit or loss.
Variable Expenses
Expenses that change in proportion to the level of activity or volume, such as raw material costs or utility expenses.
Selling Price
The amount for which a product is sold to the customer, generally set above the cost to include a profit margin.
- Learn the fundamentals of the break-even point in both revenue from sales and the volume of products sold.
Verified Answer
= ($28 - (0.65 × $28))÷ $28 = ($28.00 - $18.20)÷ $28.00 = $9.80 ÷ $28.00 = 0.35
Dollar sales to break even = Fixed expenses ÷ CM ratio
= $9,800 ÷ 0.35 = $28,000
Learning Objectives
- Learn the fundamentals of the break-even point in both revenue from sales and the volume of products sold.
Related questions
Data Concerning Buchenau Corporation's Single Product Appear Below: the ...
Last Year Easton Corporation Reported Sales of $480,000, a Contribution ...
Mio Canoe Livery Rents Canoes and Transports Canoes and Customers ...
Variable Expenses for Alpha Corporation Are 40% of Sales ...
Wimpy IncProduces and Sells a Single Product ...