The sales and cost data for two companies in the transportation industry are as follows:The annual breakeven point in sales dollars for X Company is:

Question

Quizplus · Accepted Answer

We first need to calculate the contribution margin per unit:
Contribution margin per unit = Price per unit - Variable cost per unit
For X Company, contribution margin per unit = $5.00 - $3.00 = $2.00

Next, we can use the breakeven formula:
Breakeven point (in units) = Fixed costs ÷ Contribution margin per unit
Breakeven point (in units) = $30,000 ÷ $2.00 = 15,000 units

Finally, we can calculate the breakeven point in sales dollars:
Breakeven point (in sales dollars) = Breakeven point (in units) x Price per unit
Breakeven point (in sales dollars) = 15,000 units x $6.00 = $90,000

Therefore, the annual breakeven point in sales dollars for X Company is $90,000.

The Sales and Cost Data for Two Companies in the Transportation