Asked by Ariana Rinehart on Jun 28, 2024
Verified
Bear Publishing sells a nature guide.The following information was reported for a typical month: 
What is Bear's current break-even point in unit and dollars?
A) 1,100 units and $17,600
B) 1,100 units and $8,000
C) 8,000 units and $500
D) 500 units and $8,000
Break-even Point
The level of production or sales at which total revenues equal total expenses, resulting in no profit or loss.
Unit and Dollars
Refers to the measure of financial and physical quantities in terms of units (number of items) and their monetary value in dollars.
- Attain knowledge on the concept of analyzing the break-even point in the context of units and dollars.
Verified Answer
TM
Taylor ManningJul 01, 2024
Final Answer :
D
Explanation :
CM ratio = Contribution margin ÷ Sales
= $7,920 ÷ $17,600 = 0.45
Dollar sales to break even = Fixed expenses ÷ CM ratio
= $3,600 ÷ 0.45 = $8,000
Unit sales to break even = $8,000 ÷ $16.00 per unit = 500 units
= $7,920 ÷ $17,600 = 0.45
Dollar sales to break even = Fixed expenses ÷ CM ratio
= $3,600 ÷ 0.45 = $8,000
Unit sales to break even = $8,000 ÷ $16.00 per unit = 500 units
Learning Objectives
- Attain knowledge on the concept of analyzing the break-even point in the context of units and dollars.
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