Question

Wheat Inc. produces and sells a single product. The selling price of the product is $235.00 per unit and its variable cost is $86.95 per unit. The fixed expense is $373,653 per month. The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Break-even point (dollars)= $593,100

Step-by-step explanation:

Giving the following information:

The selling price of the product is $235.00 per unit and its variable cost is $86.95 per unit. The fixed expense is $373,653 per month.

To calculate the break-even point in dollars, we need to use the following formula:

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 373,653 / [(235 - 86.95)/235]

Break-even point (dollars)= $593,100