Question

Menlo company distributes a single product. The company’s sales and expenses for last month follow: total per unit sales $ 306,000 $ 20 variable expenses 214,200 14 contribution margin 91,800 $ 6 fixed expenses 73,800 net operating income $ 18,000 required: 1. what is the monthly break-even point in unit sales and in dollar sales?

a. $91,800
b. $73,800
c. $214,200
d. $306,000

Answer 1

The break-even point in unit sales is 12,300 units and in dollar sales is $246,000.

Step-by-step explanation:

To calculate the break-even point in unit sales, we need to divide the total fixed expenses by the contribution margin per unit. In this case, the total fixed expenses are $73,800 and the contribution margin per unit is $6. So, the break-even point in unit sales is $73,800 divided by $6, which equals 12,300 units.

To calculate the break-even point in dollar sales, we need to multiply the break-even point in unit sales by the sales price per unit. In this case, the sales price per unit is $20.

So, the break-even point in dollar sales is 12,300 units multiplied by $20, which equals $246,000.