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Svetradugi [14.3K]
3 years ago
13

Wimpy Inc. produces and sells a single product. The selling price of the product is $185.00 per unit and its variable cost is $5

5.50 per unit. The fixed expense is $404,670 per month. The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $1,348,900 $944,230 $578,100 $404,670
Business
1 answer:
Aleonysh [2.5K]3 years ago
7 0

The formula for the calculation is

<u>CM ratio = Unit contribution margin ÷ Unit selling price </u>

The break-even in monthly dollar sales is closest to $578,100

Explanation:

The formula for the calculation is

<u>CM ratio = Unit contribution margin ÷ Unit selling price </u>

<u></u>

<u>Given that </u>

<u>Selling price of the product=</u>$185.00 per unit

variable cost=$55.50 per unit

fixed expense=$404,670 per month

<u></u>

= ($185.00 per unit − $55.50 per unit) ÷ $185.00 per unit

= $129.50 per unit ÷ $185.00 per unit = 0.70

<u>Dollar sales to break even = Fixed expenses ÷ CM ratio </u>

= $404,670 ÷ 0.70

= $578,100

The break-even in monthly dollar sales is closest to $578,100

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Emerald Printing Company projected the following information for next year:
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Answer:

$200,000

Explanation:

Selling price per unit = $60.00

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Total fixed costs = $150,000

Tax rate = 30%

Contribution margin ratio = Contribution margin ÷ Selling price

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                                            = 0.75

Hence,

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                              = 150,000 ÷ 0.75

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