Question

Data concerning Follick Corporation's single product appear below:

Selling price per unit	$	190.00
Variable expense per unit	$	70.30
Fixed expense per month	$	132,930

The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

a) Selling price per unit (given) $190

b) Varriable expense per unit (given) $70.30

c) Fixed expense per month = 132,930 (given)

d) contribution per unit = selling price per unit - varriable expense per unit

ie contribution = $190 - $70.30 = $119.7

e) Profit volume ratio = contribution per unit/selling price per unit

profit volume ratio = ($119.7/$190)*100 = 63%

f) Break even in monthly dollar sales = Fixed expense per month / profit volume ratio

= 132,930/63% = 211,000