Wimpy Incorporated produces and sells a single product. The selling price of the product is $150.00 per unit and its variable cost is $58.50 per unit. The fixed expense is $366,915 per month.The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $601,500
B) $366,915
C) $636,408
D) $940,808

Question

Quizplus · Accepted Answer

The break-even point is the point at which total revenue equals total cost. Total revenue is equal to the selling price per unit multiplied by the number of units sold. Total cost is equal to the variable cost per unit multiplied by the number of units sold plus the fixed cost.To find the break-even point, we can set total revenue equal to total cost and solve for the number of units sold.```Total revenue = Total costSelling price per unit * Number of units sold = Variable cost per unit * Number of units sold + Fixed cost$150.00 * Number of units sold = $58.50 * Number of units sold + $366,915$91.50 * Number of units sold = $366,915Number of units sold = $366,915 / $91.50Number of units sold = 4,015.43```To find the break-even point in monthly dollar sales, we can multiply the selling price per unit by the number of units sold.```Break-even point = Selling price per unit * Number of units soldBreak-even point = $150.00 * 4,015.43Break-even point = $602,314.50```The break-even point in monthly dollar sales is closest to $601,500.

Wimpy Incorporated Produces and Sells a Single Product