Question

Wheat Inc. produces and sells a single product. The selling price of the product is $165.00 per unit and its variable cost is $66.00 per unit. The fixed expense is $343,260 per month. The break-even in monthly dollar sales is closest to _______.

Answer 1

Answer:

$572,100

Explanation:

Given that,

Selling price of the product = $165.00 per unit

Variable cost = $66.00 per unit.

Fixed expense = $343,260 per month

Contribution margin per unit:

= Selling price - Variable cost

= $165 - $66

= $99

Break-even sales in units:

= Fixed expense ÷ Contribution margin per unit

= $343,260 ÷ $99

= 3,467.27

Break-even in monthly dollar sales:

= Break-even sales in units × Selling price of the product

= 3,467.27 × $165.00 per unit

= $572,100