Migliorise Inc., produces and sells a single product. The product sells for $300.00 per unit and its variable expense is $113.20 per unit. The company's monthly fixed expense is $420,000. Required: Determine the monthly break-even in total dollar sales. Show your Work.
Migliorise Inc., produces and sells a single product. The product sells for $300.00 per unit and its variable expense is $113.20 per unit. The company's monthly fixed expense is $420,000. Required: Determine the monthly break-even in total dollar sales. Show your Work.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Migliorise Inc., produces and sells a single product. The product sells for $300.00 per unit and its variable expense is $113.20 per unit. The company's monthly fixed expense is $420,000.
Required:
Determine the monthly break-even in total dollar sales. Show your Work.
Expert Solution
Step 1
BREAKEVEN POINT OF SALES
Breakeven point is a Point of Sales Where where total Revenue or Production is Equal to Total Cost.
Breakeven point is a Point of Sale where is no Profit or not a Loss.
Breakeven point of Sales is Computed :—
= Fixed Cost ÷ CM Ratio
Or
= Fixed Cost ÷ Contribution Margin
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