Consider the following information about the Gumm Company: Budgeted fixed costs are $550,000. The break-even point in total cases is:
A)250,000
B)275,000
C)220,000
D)200,000

Question

Consider the following information about the Gumm Company:  Budgeted fixed costs are $550,000. The break-even point in total cases is:
A)250,000 
B)275,000 
C)220,000 
D)200,000

Quizplus · Accepted Answer

Weighted-average contribution margin:
 11eb16ac_dffd_3019_984d_0d7e0fcae535_TB6154_00 $22,000 / 10,000 units = $2.20 per case
Break-even in units = fixed cost / weighted-average contribution margin
Break-even = $550,000 / $2.20 = 250,000 case

Consider the Following Information About the Gumm Company: Budgeted