The break-even point is closest to $50,846.
Let understand that the break-even point refers to the point where the total revenue equals the total costs.
- Below are steps to help us derive the break-even point.
Particulars R38T X08S Total
Sales $20,000 $39,000 $59,000
Variable costs <u>$7,400 </u> <u>$6,170 </u> <u>$13,570</u>
Contribution margin <u>$12,600 </u> <u>$32,830</u> <u>$45,430</u>
Total Contribution margin ratio = Total Contribution / Total Sales
Total Contribution margin ratio = $33,150 / $51,000
Total Contribution margin ratio = 0.65
Total Contribution margin ratio = 65%
Break even point = Fixed costs / Contribution margin ratio
Break even point = $33,050 / 0.65
Break even point = $50,846
In conclusion, the break-even point for the entire company is closest to $50,846.
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