Answer:
Instructions are below.
Explanation:
Giving the following information:
Sales= $17,600 ($16.00 selling price per unit)
Contribution margin 7,920
Fixed expenses 3,600
First, we need to calculate the unitary contribution margin:
Units sold= 17,600/16= 1,100 units
Unitary contribution margin= 7,920/1,100= $7.2
Now, using the following formulas, we can calculate the break-even point in units and dollars:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 3,600/7.2= 500 units
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 3,600/ (7.2/16)
Break-even point (dollars)=$8,000
