Answer:
Break-even point (dollars)= $80,000
Explanation:
Giving the following information:
Variable costs:
Direct materials $1.50
Direct labor 1.20
Variable overhead 0.90
Variable marketing expense 0.40
Total variable costs= 4
Fixed costs:
The fixed marketing expense totaled $13,000
The fixed administrative expense totaled $35,000.
Total fixed costs= $48,000
The price per calendar is $10.
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 48,000/ [(10 - 4)/10]
Break-even point (dollars)= 48,000/0.6
Break-even point (dollars)= $80,000
