The formula for the calculation is
CM ratio = Unit contribution margin ÷ Unit selling price
The break-even in monthly dollar sales is closest to $578,100
Explanation:
The formula for the calculation is
CM ratio = Unit contribution margin ÷ Unit selling price
Given that
Selling price of the product=$185.00 per unit
variable cost=$55.50 per unit
fixed expense=$404,670 per month
= ($185.00 per unit − $55.50 per unit) ÷ $185.00 per unit
= $129.50 per unit ÷ $185.00 per unit = 0.70
Dollar sales to break even = Fixed expenses ÷ CM ratio
= $404,670 ÷ 0.70
= $578,100
The break-even in monthly dollar sales is closest to $578,100
