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The managerial accountant at Boone Furriers reported the following contribution margin statement information: Sales Revenue = $850 per unit × number of units sold Variable Expenses = $205 per unit × number of units sold
The managerial accountant at Boone Furriers reported the following contribution margin statement information:
|
Sales Revenue = $850 per unit × number of units sold |
Variable Expenses = $205 per unit × number of units sold. |
Fixed Expenses = $340,000 |
Operating Income =$0 |
|
Sales price per unit = $850 |
Variable cost per unit = $645 × units sold |
Fixed expenses = $340,000 |
Operating Income = $0 |
|
NA |
Variable cost per unit $645 × units sold |
NA |
Operating Income = Fixed expenses = $645 |
|
NA |
Units Sold |
NA |
Fixed Expenses / Variable cost per unit |
|
NA |
Sales in Units |
NA |
X number of units necessary to reach the breakeven point. |
Use the data listed above to compute the following:
a. Compute the sales in units.
b. Compute the breakeven point in sales revenue.
A) 1,659 units; $338,900
B) 323 units; $512,000
C) 528 units; $448,800
D) 650 units; $525,000
Expert Solution
Answer: C
Explanation: C)
Sales per unit: = $850 - $205 = $645; $340,000 / $645 = 527.13 ~ 528 units
Breakeven point: Fixed Expenses = 528 units × $850 = $448,800 is the breakeven point in sales revenue
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