Sunnripe Corporation manufactures and sells two types of beach towels,standard and deluxe.Sunnripe expects the following operating results next year:
Sunnripe expects to have a total of $57,600 in fixed expenses next year.What is Sunnripe's overall break-even point next year in sales dollars?

Question

Sunnripe Corporation manufactures and sells two types of beach towels,standard and deluxe.Sunnripe expects the following operating results next year:
 Sunnripe expects to have a total of $57,600 in fixed expenses next year.What is Sunnripe's overall break-even point next year in sales dollars?

Quizplus · Accepted Answer

11ea7761_1866_4518_81a5_cb78f8ebad9e_TB2580_00 CM ratio = Contribution margin ÷ Sales
= $120,000 ÷ $500,000 = 0.24
Dollar sales to break even = Fixed expenses ÷ CM ratio
= $57,600 ÷ 0.24 = $240,000

Sunnripe Corporation Manufactures and Sells Two Types of Beach Towels,standard