Asked by Delaney DeAvila on Jun 29, 2024
Verified
The company's break-even in unit sales is closest to:
A) 118,806
B) 206,957
C) 346,087
D) 14,775
Break-even
The juncture where overall expenses match total income, indicating neither profit nor loss is present.
Unit Sales
The total quantity of an item or product sold.
- Acquire an understanding of the theory and computational process of determining break-even points in unit sales and monetary sales.
Verified Answer
MW
Megan WillisJun 30, 2024
Final Answer :
C
Explanation :
Contribution margin = Sales - Variable expenses
= $2,412,000 - ($1,170,000 + $414,000)
= $2,412,000 - $1,584,000 = $828,000
Unit CM = $828,000 ÷ 360,000 bundles = $2.30 per bundle
Fixed expenses = $714,000 + $82,000 = $796,000
Unit sales to break even = Fixed expenses ÷ Unit CM
= $796,000 ÷ $2.30 per bundle = 346,087 bundles
= $2,412,000 - ($1,170,000 + $414,000)
= $2,412,000 - $1,584,000 = $828,000
Unit CM = $828,000 ÷ 360,000 bundles = $2.30 per bundle
Fixed expenses = $714,000 + $82,000 = $796,000
Unit sales to break even = Fixed expenses ÷ Unit CM
= $796,000 ÷ $2.30 per bundle = 346,087 bundles
Learning Objectives
- Acquire an understanding of the theory and computational process of determining break-even points in unit sales and monetary sales.