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-   -   Managerial accounting, break-even point ? (https://www.askmehelpdesk.com/showthread.php?t=743191)

  • Apr 8, 2013, 01:31 AM
    lovelymaz
    managerial accounting, break-even point ?
    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?
  • Apr 8, 2013, 01:41 AM
    lovelymaz
    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

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