Werth Company produces tie racks. The estimated fixed costs for the year are $28

Question

Werth Company produces tie racks. The estimated fixed costs for the year are $288,000, and the estimated variable costs per unit are $14. Werth expects to produce and sell 60,000 units at a price of $20 per unit. By how much can sales revenue drop before Werth incurs a loss? Answer A. $72,000 B. $12,000 C. $360,000 D. $240,000

I came up with 360,000 can someone help me to make sure this is correct Werth Company produces tie racks. The estimated fixed costs for the year are $288,000, and the estimated variable costs per unit are $14. Werth expects to produce and sell 60,000 units at a price of $20 per unit. By how much can sales revenue drop before Werth incurs a loss? Werth Company produces tie racks. The estimated fixed costs for the year are $288,000, and the estimated variable costs per unit are $14. Werth expects to produce and sell 60,000 units at a price of $20 per unit. By how much can sales revenue drop before Werth incurs a loss? $72,000 $12,000 $360,000 $240,000

I came up with 360,000 can someone help me to make sure this is correct A. $72,000 B. $12,000 C. $360,000 D. $240,000

I came up with 360,000 can someone help me to make sure this is correct

Explanation / Answer

Breakeven point = 20*288,000/(20-14) =$960000

current sales = 20*60000 =$1200000

Difference = $1200000-$960000 =$240000

D. $240,000

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