Answer:
Instructions are below.
Explanation:
Giving the following information:
Sunland Company estimates that variable costs will be 60.00% of sales.
Fixed costs= $632,000
The selling price of the product is $5.
<u>First, we need to calculate the unitary variable cost:</u>
Unitary variable cost= 5*0.6= $3
<u>Now, using the following formulas, we can determine the break-even point in units and dollars.</u>
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 632,000 / (5 - 3)
Break-even point in units= 316,000 units
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 632,000 / (2/5)
Break-even point (dollars)= $1,580,000
