Flannigan Company manufactures and sells a single product that sells for $450 per unit;variable costs are $300.Annual fixed costs are $870,000.Current sales volume is $4,200,000.Compute the break-even point in dollars.

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Quizplus · Accepted Answer

The break-even point in dollars is calculated by dividing the total fixed costs by the contribution margin ratio. Contribution margin per unit is $450 - $300 = $150. Contribution margin ratio is $150 / $450 = 1/3. Break-even point in dollars = $870,000 / (1/3) = $2,610,000, which is closest to $2,612,612.

Flannigan Company Manufactures and Sells a Single Product That Sells