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Question 1 Calculate the break-even point in dollars from the following information. Selling price per unit...

Question 1

  1. Calculate the break-even point in dollars from the following information. Selling price per unit is $50, variable costs per unit are $30 and fixed costs for the year are $25 000

    a.

    $1 250
    b.

    Unable to be determined from the information given
    c.

    $83 333
    d.

    $41 667
    e.

    $62 500

1 points

Question 2

  1. If McLeod Ltd’s selling price is $50 per unit, fixed costs are $499 800, and the contribution margin ratio is 0.34. The break-even in sales dollars (rounded to the nearest dollar) is:

    a.

    $499 800
    b.

    $169 932
    c.

    $1 470 000
    d.

    Unable to be determined from the information given
    e.

    $757 273
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Homework Answers

Answer #2

A1. The correct answer is Option (E) $62,500

Break Even Point in dollars = Total Fixed Costs / Contribution Margin (CM) Ratio

CM Ratio = CM / Selling Price per unit

= (50-30) / 50

= 20 / 50

= 0.4

Break Even Point = $25,000 / 0.4

= $62,500

A2. The correct answer is Option (C) $1,470,000

Break Even Point in dollars = Total Fixed Costs / Contribution Margin (CM) Ratio

= $499,800 / 0.34

= $1,470,000

In case of any query/clarification please leave a comment below, if the answer was helpful please leave a thumbs up, Thanks!

answered by: anonymous
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