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Compute the break-even point in dollar sales for year

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Question - Jetson Co. sold 20,300 units of its only product and incurred a $78,798 loss (ignoring taxes) for the current year as shown here. During a planning session for year 2012's activities, the production manager notes that variable costs can be reduced 50% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $153,000. The maximum output capacity of the company is 40,000 units per year.

JETSON COMPANY
Contribution Margin Income Statement
For Year Ended December 31, 2011

Sales

$767,340

Variable costs

537,138

Contribution margin

230,202

Fixed costs

309,000

Net loss

$(78,798)

Compute the break-even point in dollar sales for year 2011.

Reference no: EM131815831

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