Question

Ploeger Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (4,000 units) $ 240,000 Variable expenses 156,000 Contribution margin 84,000 Fixed expenses 81,900 Net operating income $ 2,100 The break-even point in dollar sales is closest to: Multiple Choice $234,000 $156,000 $237,900 $0

Answer 1

Answer:

Break-even point (dollars)= $234,000

Explanation:

Giving the following information:

Sales (4,000 units) $ 240,000

Variable expenses 156,000

Fixed expenses 81,900

To calculate the break-even point in dollars, first, we need to determine the selling price and unitary variable cost:

Selling price= 240,000/4,000= $60

Unitary variable cost= 156,000/4,000= $39

Now, we can calculate the break-even point:

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 81,900/ [(60 - 39) / 60]= $234,000