A break-even point is the point at which there is no profit or loss for the company. At break-even point total of fixed costs and variable costs is equal to the total revenue. The calculation of break-even point is very important for every business because it tells that how much of the minimum quantity will be required to produce and sell to meet the fixed and variable cost. Single product break-even analysis means to calculate break-even point for a single product i.e. no profit or loss for that particular product. Multi product break –even point analysis means calculation of break-even point point of no profit or loss for the overall company or all products. To determine: In the given question, we have to determine that Apple co. should use single product break-even or multi-product break-even analysis.

Question

The following errors took place in journalizing and posting transactions:a. The payment of $3,125 from a customer on account was recorded as a debit to Cash and a credit toAccounts Payable.b. Advertising expense of $1,500 paid for the current month was recorded as a debit to MiscellaneousExpense and a credit to Advertising Expense.c. The purchase of supplies of $2,690 on the account was recorded as a debit to Office Equipment anda credit to Supplies.d. The receipt of $3,750 for services rendered was recorded as a debit to Accounts Receivable and acredit to Fees Earned.Required:Prepare journal entries to correct the errors.Each error correction carries equal marks.

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Chapter 21, Problem 20DQ

To determine

A break-even point is the point at which there is no profit or loss for the company. At break-even point total of fixed costs and variable costs is equal to the total revenue. The calculation of break-even point is very important for every business because it tells that how much of the minimum quantity will be required to produce and sell to meet the fixed and variable cost.

Single product break-even analysis means to calculate break-even point for a single product i.e. no profit or loss for that particular product.

Multi product break –even point analysis means calculation of break-even point point of no profit or loss for the overall company or all products.

To determine:

In the given question, we have to determine that Apple co. should use single product break-even or multi-product break-even analysis.

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