Question

Wyly Inc. produces and sells a single product. The selling price of the product is $225.00 per unit and its variable cost is $90.00 per unit. The fixed expense is $354,060 per month.
The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)
$885,150
$531,090
$590,100
$354,060

Answer 1

Answer:

Option (C) is correct.

Explanation:

Contribution per unit:

= selling price - variable cost per unit

= $225 - $90

= $135 per unit

Break-even in (Units):

= fixed expense ÷ Contribution per uni

= 354,060 ÷ 135

= 2622.67

So, Break-even in Sales:

= Break-even units × selling price

= 2622.67 × $225

= $590,100

Therefore, the break-even in monthly dollar sales is closest to $590,100.