Newham Corporation produces and sells two products. In the most recent month, Product R10L had sales of $43,000 and variable expenses of $11,980. Product X96N had sales of $56,000 and variable expenses of $14,750. The fixed expenses of the entire company were $46,180. The break-even point for the entire company is closest to:

Question

Quizplus · Accepted Answer

To find the break-even point, we need to calculate the total contribution margin of both products and then divide the fixed expenses by the contribution margin per unit.

Contribution margin for Product R10L = Sales - Variable expenses = $43,000 - $11,980 = $31,020
Contribution margin for Product X96N = Sales - Variable expenses = $56,000 - $14,750 = $41,250

Total contribution margin = $31,020 + $41,250 = $72,270

Break-even point = Fixed expenses ÷ Total contribution margin per unit
Break-even point = $46,180 ÷ $72,270 ≈ $63,260.

Therefore, the closest answer is C) $63,260.

Newham Corporation Produces and Sells Two Products