Question

g Closser Corporation produces and sells two products. In the most recent month, Product M50S had sales of $43,000 and variable expenses of $11,980. Product H50G had sales of $56,000 and variable expenses of $14,750. The fixed expenses of the entire company were $46,180. The break-even point for the entire company is closest to:

Answer 1

Answer:

$63,260

Explanation:

Break-even point is the level of Activity where a firm neither makes a profit nor a loss.

Break even point (Dollars) = Fixed Costs / Contribution Margin Ratio

Contribution Margin Ratio

Is calculated as := Contribution / Sales

                           = (Sales less Variable Costs) / Sales    

                           = ($43,000+$56,000-$11,980-$14,750) / $99,000

                           = $72,270/$99,000

                           = 0.73

Break even point (Dollars) = $46,180 /  0.73

                                            = $63,260