Question

Newham Corporation produces and sells two products. In the most recent month, Product R10L had sales...

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

Homework Answers

Answer #1
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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