Newham Corporation produces and sells two products. In the most recent month, Product R10L had sales of $28,000 and variable expenses of $6,440. Product X96N had sales of $22,000 and variable expenses of $7,560. The fixed expenses of the entire company were $32,710. The break-even point for the entire company is closest to:

Question

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To find the break-even point, we first calculate the contribution margin for each product and then the overall contribution margin ratio for the company. For Product R10L, the contribution margin is $28,000 - $6,440 = $21,560. For Product X96N, it's $22,000 - $7,560 = $14,440. The total contribution margin is $21,560 + $14,440 = $36,000. The total sales are $28,000 + $22,000 = $50,000. The contribution margin ratio is $36,000 / $50,000 = 0.72 or 72%. The break-even point in sales dollars is the fixed expenses divided by the contribution margin ratio: $32,710 / 0.72 = $45,431.

Newham Corporation Produces and Sells Two Products