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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? |
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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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