Wimpy Incorporated produces and sells a single product. The selling price of the product is $235.00 per unit and its variable cost is $86.95 per unit. The fixed expense is $373,653 per month.The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $1,009,873
B) $636,220
C) $593,100
D) $373,653

Question

Quizplus · Accepted Answer

The break-even point in units can be calculated as:

Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)
= $373,653 / ($235.00 - $86.95)
= 2,693.78 units

To convert this to the break-even point in dollars, multiply by the selling price:

2,693.78 units x $235.00 per unit = $632,016.30

Therefore, the closest answer choice is C) $593,100.

Wimpy Incorporated Produces and Sells a Single Product