Data concerning Buchenau Corporation's single product appear below: The break-even in monthly unit sales is closest to: (Round your intermediate calculations to 2 decimal places.)
A) 3,111
B) 6,892
C) 4,040
D) 13,525

Question

Data concerning Buchenau Corporation's single product appear below:  The break-even in monthly unit sales is closest to: (Round your intermediate calculations to 2 decimal places.)
A) 3,111 
B) 6,892 
C) 4,040 
D) 13,525

Quizplus · Accepted Answer

Break-even point is the level of sales at which profit is zero. It is calculated by dividing the total fixed costs by the contribution margin per unit, where contribution margin is the amount of revenue remaining after deducting variable costs.

In the given data, the fixed costs are $33,840 per month, and the contribution margin per unit is $14.70. Therefore, the break-even point in monthly unit sales is:

Break-even point = Fixed costs ÷ Contribution margin per unit
= $33,840 ÷ $14.70
= 2,300 units

So, the closest option to the break-even point in monthly unit sales is 4,040 units (option C), which is the highest multiple of 500 above the break-even point. Therefore, the best choice is option C.

Data Concerning Buchenau Corporation's Single Product Appear Below: the Break-Even