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natita [175]
2 years ago
11

Henna Company produces and sells two products, Carvings and Mementos. It manufactures these products in separate factories and m

arkets them through different channels. They have no shared costs. This year, the company sold 58,000 units of each product. Income statements for each product follow. Carvings Mementos Sales $ 974,400 $ 974,400 Variable costs 779,520 194,880 Contribution margin 194,880 779,520 Fixed costs 46,880 631,520 Income $ 148,000 $ 148,000 rev: 09_29_2021_QC_CDR-376 Required: 1. Compute the break-even point in dollar sales for each product. (Enter CM ratio as percentage rounded to 2 decimal places.)
Business
1 answer:
yan [13]2 years ago
7 0

The computation of the break-even point in dollar sales for each product is as follows:

Carvings = $234,400 ($46,880/0.2)

Mementos = $789,400 ($631,520/0.8)

<h3>What is the break-even point?</h3>

The break-even point represents the dollar sales or units at which the entity does not incur any loss or earn any profit.

At the break-even point, the total costs are equal to the total revenue.

<h3>Data and Calculations:</h3>

                                  Carvings     Mementos

Sales                         $ 974,400   $ 974,400

Variable costs             779,520       194,880

Contribution margin    194,880      779,520

CM Ratio                        20%             80%

Fixed costs                    46,880      631,520

Income                     $ 148,000   $ 148,000

Break-even point = Fixed costs/CM Ratio

Thus, the break-even points in sales dollars are Carvings, $234,400,, and Mementos, $789,400.

Learn more about the break-even point at brainly.com/question/15281855

#SPJ1

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