Question

Marigold reported the following information for the current year: Sales (59000 units) $1180000, direct materials and direct labor $590000, other variable costs $59000, and fixed costs $360000. What is Marigold’s break-even point in units?

Answer 1

Answer:

Marigold break-even point  = 400,000 units

Explanation:

given data

Sales = 59000 units

direct materials = $1180000

direct labor = $590000

variable costs = $59000

fixed costs = $360000

solution

we get here Marigold’s break-even point in units that is express as

Marigold’s break-even point = Fixed Cost ÷ (Selling Price - Variable Cost)  .............1

Break Even Point = Fixed Cost ÷ Contribution Margin    ............2

so here

Contribution Margin will be = $\frac{1180000 - (590000+59000)}{59000}$  

Contribution Margin = $9

now put value in equation 2 we get

Marigold break-even point =  $\frac{360,000}{9}$

Marigold break-even point  = 400,000 units