Question

Mauro Products distributes a single product, a woven basket whose selling price is $15 per unit and whose variable expense is $13 per unit. The company’s monthly fixed expense is $4,600.

**Required:**

1. Calculate the company’s break-even point in unit sales.

2. Calculate the
company’s break-even point in dollar sales. **(Do not
round intermediate calculations.)**

3. If the company's
fixed expenses increase by $600, what would become the new
break-even point in unit sales? In dollar sales?
**(Do not round intermediate
calculations.)**

Answer #1

1.

Break-even point in units = Fixed expense / Contribution margin per unit |

Break-even point in units = $4,600 / ($15-$13) |

Break-even point in units = 2,300 Units |

2.

Break-even point in Dollars = Break-even point in units * Selling price per unit |

Break-even point in Dollars = 2,300*$15 |

Break-even point in Dollars = $34,500 |

3.

Break-even point in units = Fixed expense / Contribution margin per unit |

Break-even point in units = ($4,600+$600) / ($15-$13) |

Break-even point in units = 2,600 Units |

Break-even point in Dollars = Break-even point in units * Selling price per unit |

Break-even point in Dollars = 2,600*$15 |

Break-even point in Dollars = $39,000 |

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whose selling price is $12 per unit and whose variable expense is
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Required:
1. Calculate the company’s break-even point in unit sales.
2. Calculate the company’s break-even point in dollar sales.
(Do not round intermediate calculations.)
3. If the company's fixed expenses increase by $600, what would
become the new break-even point in unit sales? In dollar sales?
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whose selling price is $16 per unit and whose variable expense is
$14 per unit. The company’s monthly fixed expense is $2,800.
Required:
1. Calculate the company’s break-even point in unit sales.
2. Calculate the company’s break-even point in dollar sales.
(Do not round intermediate calculations.)
3. If the company's fixed expenses increase by $600, what would
become the new break-even point in unit sales? In dollar sales

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whose selling price is $19 per unit and whose variable expense is
$17 per unit. The company’s monthly fixed expense is $2,800.
Required:
1. Calculate the company’s break-even point in unit sales.
2. Calculate the company’s break-even point in dollar sales.
(Do not round intermediate calculations.)
3. If the company's fixed expenses increase by $600, what would
become the new break-even point in unit sales? In dollar sales?

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