Hug Me Company produces dolls.Each doll sells for $20.00.Variable costs per unit total $14.00, of which $6.25 is for direct materials and $5.25 is for direct labor.If the break-even volume in dollars is $1,446,000, then the total fixed costs for the period must be _____.
A)$433,800
B)$361,500
C)$516,425
D)$1,446,000

Question

Quizplus · Accepted Answer

Break-even volume in dollars = Total fixed costs / (Selling price per unit - Variable cost per unit)$1,446,000 = Total fixed costs / ($20.00 - $14.00)$1,446,000 = Total fixed costs / $6.00Total fixed costs = $1,446,000 x $6.00Total fixed costs = $8,676,000

Hug Me Company Produces Dolls