Question

Newham Corporation produces and sells two products. In the most recent month, Product R10L had sales of $19,000 and variable expenses of $10,030. Product X96N had sales of $32,000 and variable expenses of $15,980. The fixed expenses of the entire company were $45,940. The break-even point for the entire company is closest to:

Answer 1

Answer:

The break-even point for the entire company is closest to 2 units

Explanation:

The Break even point is the point where a firm neither makes a profit nor a loss.

Break Even Point = Fixed Cost / Contribution per unit

                             = $45,940 /(($19,000-$10,030)+($32,000-$15,980))

                             = $45,940/$8,970+$16,020

                             = 2 units