Question

Maxson Products distributes a single product, a woven basket whose selling price is $8 and whose variable cost is $6 per unit. The company’s monthly fixed expense is $5,500.Required:1. Solve for the company’s break-even point in unit sales using the equation method.2. Solve for the company’s break-even point in sales dollars using the equation method and the CM ratio.3. Solve for the company’s break-even point in unit sales using the formula

Answer 1

Step-by-step explanation:

(SP-VC)*Q

$(8-6)Q = $5500

Q=5500/2

Break even quantity = 2750 units per month

2. Sales = $8 x 2750 = $ 22,000