Determine the break even- point in terms of dollars

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Reference no: EM1311298

Compute the Break even- point in terms of dollars.

Penury Company offers two products. At present, the following represents the usual results of a month's operations:

	*Product K*	*Product L*
		Per		Per	Combined
	Amount	Unit	Amount	Unit	Amount
Sales revenue	$120,000	$1.20	$80,000	$0.80	$200,000
Variable expenses	60,000	0.60	60,000	0.60	120,000
Contribution margin	$ 60,000	$0.60	$20,000	$0.20	80,000
Fixed expenses					50,000
Net operating income					$ 30,000

Using Excel,

The company is considering decreasing product K's unit sales to 80,000 and increasing product L's unit sales to 180,000, leaving unchanged the selling price per unit, variable expense per unit, and total fixed expenses.

Under the new plan, find the break-even point in terms of dollars.

Reference no: EM1311298

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