In which of the following scenarios would the short-cut method be permissible? A) A lease term of 6 months with an option to ren
1 answer:
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Answer:
Marigold break-even point = 400,000 units
Explanation:
given data
Sales = 59000 units
direct materials = $1180000
direct labor = $590000
variable costs = $59000
fixed costs = $360000
solution
we get here Marigold’s break-even point in units that is express as
Marigold’s break-even point = Fixed Cost ÷ (Selling Price - Variable Cost) .............1
Break Even Point = Fixed Cost ÷ Contribution Margin ............2
so here
Contribution Margin will be =
Contribution Margin = $9
now put value in equation 2 we get
Marigold break-even point =
Marigold break-even point = 400,000 units