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What was best quality breakeven point in revenue

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Reference no: EM133057079

Question - Scenario - Best Quality (BQ) manufacturers and sells food processors. BQ sells its food processors to restaurants and supermarkets employing an internal sales staff who are paid on sales commissions of 10% of the food processor's sales price. In FY 2020, BQ sold 10,000 units at an average unit price of $195.00. Additional UG FY 2020 financial information appears below:

FY 2020

Sales $1,950,000.00

COGS $1,260,500.00

Gross Margin $689,500.00

SG&A Expenses* $358,000.00

*includes sales commissions. Other SG&A expenses do not vary with sales.

Operating Profit $331,500.00

Product Cost Details $ / unit

Direct Materials $35.10

Direct Labor $23.40

Variable Mfg. Overhead $15.60

Fixed Mfg. Overhead $51.95

Total Production Cost $126.05

Calculate the values for the following questions. Show your work/assumptions.

1) What is Best Quality's FY 2020 Total Contribution Margin $?

2) Based on the financial information in Question #1 above, what was Best Quality's breakeven point in revenue $ in FY 2020?

Reference no: EM133057079

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