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View Full Version : Managerial accounting, break-even point ?


lovelymaz
Apr 8, 2013, 01:31 AM
Mason Enterprises has prepared the following budget for the month of July:
Selling Variable Unit
price per unit cost per unit sales
Product A... $10.00 $4.00 15,000
Product B... $15.00 $8.00 20,000
Product C... $18.00 $9.00 5,000

Assuming that total fixed expenses will be $150,000 and the sales mix remains
constant, the break-even point would be closest to?

lovelymaz
Apr 8, 2013, 01:41 AM
I got the answer
first calculate the total sales and total variable expense for each product (Price per unit*unit sales)
Sales Variable
product A 150000 60000
product B 300000 160000
product C 90000 45000

Total sales = 540000
total variable sales= 265000
Contribution margin ratio = (540000-265000) / 540000 = 0.5092592593

Sales at break-even point= Fixed expense / Contribution margin ratio
= 150000 / 0.5092592593 = 294545.45