If fixed costs are $277,000, the unit selling price is $29, and the unit variabl
ID: 2552608 • Letter: I
Question
If fixed costs are $277,000, the unit selling price is $29, and the unit variable costs are $18, what is the break-even sales (units) if fixed costs are reduced by $43,700?
16,967 units
31,814 units
21,209 units
25,451 units
If fixed costs are $719,000 and variable costs are 63% of sales, what is the break-even point in sales dollars?
$1,943,243
$2,662,243
$1,171,970
$452,970
If fixed costs are $272,000, the unit selling price is $123, and the unit variable costs are $74, what is the break-even sales (units)?
5,551 units
2,211 units
1,381 units
3,676 units
Explanation / Answer
Contribution margin=Sales-Variable costs
1.Contribution margin=(29-18)=$11
Breakeven=Fixed cost/Contribution margin
=(277000-43700)/11
=21209 units
2.Contribution margin ratio=(100-63)=37% of sales
Hence breakeven=fixed cost/Contribution margin ratio
=(719000/0.37)=1943243(Approx).
3.Contribution margin=(123-74)=$49
Hence breakeven=272000/49=5551 units(Approx).
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