Asked by Alexis Klein on Jul 22, 2024
Verified
Data concerning Buchenau Corporation's single product appear below: The break-even in monthly unit sales is closest to:
A) 3,111
B) 6,892
C) 4,040
D) 13,525
Break-Even
The point at which total costs and total revenues are equal, resulting in no net loss or gain for the business.
Monthly Unit Sales
The total number of units of a product sold by a company in one month.
- Comprehend the principle of the break-even point in terms of both monetary sales and number of units sold.
Verified Answer
TS
Trisha SalcedoJul 27, 2024
Final Answer :
C
Explanation :
The break-even point can be calculated using the formula:
Break-even point = Fixed costs / (Selling price per unit - Variable cost per unit)
Given data:
Selling price per unit = $75
Variable cost per unit = $50
Contribution margin per unit = Selling price per unit - Variable cost per unit = $75 - $50 = $25
Fixed costs = $101,500
Break-even point = $101,500 / $25 = 4,060 units
Therefore, the closest option to the break-even in monthly unit sales is 4,040 units, which is option C.
Break-even point = Fixed costs / (Selling price per unit - Variable cost per unit)
Given data:
Selling price per unit = $75
Variable cost per unit = $50
Contribution margin per unit = Selling price per unit - Variable cost per unit = $75 - $50 = $25
Fixed costs = $101,500
Break-even point = $101,500 / $25 = 4,060 units
Therefore, the closest option to the break-even in monthly unit sales is 4,040 units, which is option C.
Explanation :
Unit sales to break even = Fixed expenses ÷ Unit CM
= $466,620 ÷ ($150.00 per unit - $34.50 per unit)
= $466,620 ÷ $115.50 per unit
= 4,040 units
= $466,620 ÷ ($150.00 per unit - $34.50 per unit)
= $466,620 ÷ $115.50 per unit
= 4,040 units
Learning Objectives
- Comprehend the principle of the break-even point in terms of both monetary sales and number of units sold.
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