Respuesta :
Answer:
Break even point in dollars = $28,000
Explanation:
We know Sales - Variable Cost = Contribution
Thus, if we are provided that Variable expenses = 65% then contribution = 100 - 65 = 35%
Also provided selling price per unit = $28
Contribution Therefore = $28 [tex]\times[/tex] 35% = $9.80
Break even point in dollars = [tex]\frac{Fixed\: Cost}{Contribution\: Margin}[/tex]
Here, fixed cost = $9,800
Contribution margin = 35%
Putting values in above formula we have,
Break even point in dollars = [tex]\frac{9,800}{0.35} = $28,000[/tex]
Answer:
The break-even point is $28,000
Explanation:
Since, the sale value is not given in the question, so we have to compute the profit volume ratio which is equals to
= (Sales per unit - Variable cost per unit ) ÷ Sales × 100
Where,
Sale per unit is $28
Variable cost per unit = 65% of sales per unit = 65 ÷100 × 28 = $18.2
So, profit volume ratio equals to
= ($28 - $18.2) ÷ $28 × 100
= 35%
Now, we can easily calculate the break even point. The formula is shown below:
= Fixed expense ÷ Profit volume ratio
= $9,800 ÷ 35%
= $28,000
Hence, the break-even point is $28,000
