Wenstrom Corporation produces and sells a single product.Data concerning that product appear below:
The break-even in monthly dollar sales is closest to:
A) $342,550
B) $204,455
C) $109,616
D) $161,200

Question

Wenstrom Corporation produces and sells a single product.Data concerning that product appear below:
 The break-even in monthly dollar sales is closest to:
A) $342,550 
B) $204,455 
C) $109,616 
D) $161,200

Quizplus · Accepted Answer

CM ratio = Unit contribution margin ÷ Unit selling price
= ($130.00 per unit - $41.60 per unit) ÷ $130.00 per unit
= $88.40 per unit ÷ $130.00 per unit = 0.68
Dollar sales to break even = Fixed expenses ÷ CM ratio
= $109,616 ÷ 0.68
= $161,200

Wenstrom Corporation Produces and Sells a Single Product