Borich Corporation produces and sells a single product

Accounting Apr 25, 2021

Borich Corporation produces and sells a single product. Data concerning that product appear below:
Selling price per unit $150.00 Variable expense per unit 573.50 Fixed expense per month S308,295
The break-even in monthly unit sales is closest to: a. 2,055 b. 4,030 c. 4,194 d. 3.426

Expert Solution

Computation of Breakeven in Monthly Unit Sales:

Breakeven Unit Sales = Fixed Expenses/Contribution Margin per Unit

Here,

Contribution Margin per Unit = Sales Price per Unit - Variable Expense per Unit = $150 - $73.50 = $76.50

Breakeven Unit Sales = $308,295/$76.50 = 4,030 units

So, the correct option is B "4,030 units".

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