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valentinak56 [21]
3 years ago
6

North Company sells a single product. The product has a selling price of $30 per unit and variable expenses of 70% of sales. If

the company's fixed expenses total $60,000 per year, then it will have a break-even of:
Business
1 answer:
zavuch27 [327]3 years ago
5 0

Answer:

$200,000

Explanation:

Given:

Selling price = $30

variable expenses = 70% of  = 70% of $30 = $21

Fixed cost = $60,000

Computation of contribution margin :

Contribution\ margin = \frac{Selling\ price-variable\ expenses}{Selling\ price}\\\\Contribution\ margin = \frac{30-21}{30}\\\\Contribution\ margin = 0.3\\\\

Computation of break-even sales:

Break-even sales = Fixed cost / contribution margin

Break-even sales = $60,000 / 0.3

Break-even sales = $200,000

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Answer:

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