Newham Corporation produces and sells two products. In the most recent month, Product R10L had sales of $21,000 and variable expenses of $10,050. Product X96N had sales of $34,000 and variable expenses of $16,900. The fixed expenses of the entire company were $45,960. The break-even point for the entire company is closest to: Multiple Choice $90,118 $28,050 $45,960 $72,910
R10L | X96N | Total Company | |
Sales | 21,000 | 34,000 | 55,000 |
Variable expenses | -10,050 | -16,900 | -26,950 |
Contribution margin | 10,950 | 17,100 | 28,050 |
Total Contribution margin for the company = $28,050
Total sales for the company = $55,000
Contribution margin ratio = Total Contribution margin for the company/ Total sales for the company
= 28,050/55,000
= 51%
Fixed expenses for the company = $45,960
Break even point = Fixed expenses for the company/ Contribution margin ratio
= 45,960/51%
= 90,118
The break-even point for the entire company is closest to $90,118.
First option is correct.
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