Reference no: EM132615648
Question - SafeMasks Pte Ltd manufactures and sells disposable face masks, which it sells in boxes of 20. Price and cost data per box of 20 masks are as follows:
Selling price per box $25.00
Variable costs per box:
Direct material $10.50
Direct labour 5.00
Manufacturing overhead 3.00
Selling costs 1.30
Total variable costs per box $19.80
Annual total fixed costs:
Manufacturing overhead $192,000
Selling and administrative 276,000
Total fixed costs $468,000
Forecast annual sales (120,000 boxes) $3,000,000
Required -
1. What is the company's break-even point in sales dollars?
2. Explain how SafeMasks could use break-even and cost-volume-profit (CVP) analysis for planning and control purposes.