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Exercise : Compute the Break-Even Point [LO6]

Maxson Products distributes a single product, a woven basket whose selling price is $28 and whose variable cost is $21.84 per unit. The company's monthly fixed expense is $14,784.

 

Required:
1. Compute for the company's break-even point in unit sales using the equation method.

 

  Break-even point in unit sales baskets

 

2.

Compute for the company's break-even point in sales dollars using the equation method and the CM ratio. (Do not round intermediate calculations. Round your CM ratio to 2 decimal places.)

 

  CM ratio   
  Break-even point in dollar sales $   

 

3. Compute for the company's break-even point in unit sales using the formula method.

 

  Break-even point in unit sales baskets

 

4.

Compute for the company's break-even point in sales dollars using formula method and the CM ratio.(Do not round intermediate calculations. Round your CM ratio to 2 decimal places.)

 

  CM ratio   
  Break-even point in dollar sales $   

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M9797522

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