Question

Blackner corporation produces and sells a single product. data concerning that product appear below: selling price per unit $220.00 variable expense per unit $70.40 fixed expense per month $492,184 the break-even in monthly dollar sales is closest to:

Answer 1

Answer:

$723,800

Step-by-step explanation:

To find the break even point, we first need to find the number of units needed for the break even point using the formula:

$BreakEvenPointInUnits=\dfrac{FixedCost}{SalesPricePerUnit-VariableCostPerUnit}$

Let's break down the variables that we have.

Fixed Cost = $492,184

Sales Price Per Unit = $220.00

Variable Cost Per Unit = $70.40

Now let's use the formula and input all the values.

$BreakEvenPointInUnits=\dfrac{ 492,184}{ 220.00- 70.40}$

$BreakEvenPointInUnits=\dfrac{ 492,184}{ 149.6}$

$BreakEvenPointInUnits=3,290Units$

Now that we know the amount of units needed to break even, we then use the formula:

$BreakEvenPointsInDollars=SalesPriceperUnitxBreakEvenPointInUnits$

$BreakEvenPointsInDollars= 220.00x3,290$

$BreakEvenPointsInDollars= 723,800$

So this means the the break-even in monthly dollar sales is closest to $723,800.