Solution-Compute the company break-even point in sales

Compute the company break-even point in sales dollars

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Reference no: EM132828550

Problem 1 - Mauro Products has a single product, a woven basket whose selling price is $54 and variable cost is $45 per unit. The company's month Iy fixed expenses are $26,550.

Required -

1. Compute the company's break-even point in unit sales using the equation method.

2. Compute the company's break-even point in sales dollars using the equation method and the CM ratio.

3. Compute the company's break-even point in unit sales using the contribution margin method.

4. Compute the company's break-even point in sales dollars using the contribution margin method and the CM ratio

Problem 2 - Klinken Corporation's contribution margin ratio on the sale of its most popular product is 42%. The product is priced at $80, annual fixed expenses are $800,000. Management is evaluating two options: (1) lowering variable costs by 10% and (2) reducing fixed expenses by 10%.

Required - Calculate the current level of break-even sales in dollars, as well as the break-even sales for the two options.

Reference no: EM132828550

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Compute the company break-even point in sales dollars

Reference no: EM132828550

Reference no: EM132828550

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