Question

Newham Corporation produces and sells two products. In the most recent month, Product R10L had sales of $31,000 and variable expenses of $10,780. Product X96N had sales of $44,000 and variable expenses of $18,470. The fixed expenses of the entire company were $46,060. The break-even point for the entire company is closest to:
Multiple Choice

a.$75,508

b.$75,468

c.$75,310

d.$46,060

Answer 1

Answer:

a.$75,508

Explanation:

Newham Corporation

Break Even Sales = Fixed Expenses/ 1- (Variable Expenses/ Sales)

We combined the Break Even Sales by adding the sales of the two products and the variable expenses of the two products.

Break Even Sales =$46,060/1-($10,780+$18,470/$31,000+ $44,000)

Break Even Sales =$46,060/1-(29250/75,000)

Break Even Sales =$46,060/ 1-0.39

Break Even Sales =$46,060/ 0.61

Break Even Sales = $75,508.19