A manufacturer of tiling grout has supplied the following data:

-The company's break-even in unit sales is closest to:
A) 272,308
B) 98,333
C) 92,055
D) 60,488

Question

A manufacturer of tiling grout has supplied the following data:
 
-The company's break-even in unit sales is closest to:
A) 272,308 
B) 98,333 
C) 92,055 
D) 60,488

Quizplus · Accepted Answer

Contribution margin = Sales - Variable expenses
= $2,736,000 - ($1,349,000 + $399,000)
= $2,736,000 - $1,748,000 = $988,000
Unit CM = $988,000 ÷ 380,000 kilograms = $2.60 per kilogram
Unit sales to break even = Fixed expenses ÷ Unit CM
= $708,000 ÷ $2.60 per kilogram = 272,308 kilograms

A Manufacturer of Tiling Grout Has Supplied the Following Data