Wallace,Inc.prepared the following budgeted data based on a sales forecast of $6,000,000: What would be the amount of sales dollars at the break-even point?

Question

Wallace,Inc.prepared the following budgeted data based on a sales forecast of $6,000,000:  What would be the amount of sales dollars at the break-even point?

Quizplus · Accepted Answer

To find the break-even point, we need to find the level of sales where the company's total expenses equal its total revenue. Using the budgeted data provided, we can calculate the break-even point using the following formula:

Break-even point = Fixed expenses / (Sales price per unit - Variable expenses per unit)

Plugging the values from the budgeted data into the formula, we get:

Break-even point = $3,330,000 / ($180 - $105)

Break-even point = $3,330,000 / $75

Break-even point = $44,400 units

To find the amount of sales dollars at the break-even point, we multiply the break-even point by the sales price per unit:

Sales dollars at break-even point = $44,400 x $180

Sales dollars at break-even point = $7,992,000

Therefore, the answer is C, $4,000,000.