Bear Publishing sells a nature guide.The following information was reported for a typical month: What is Bear's current break-even point in unit and dollars?
A)1,100 units and $17,600
B)1,100 units and $8,000
C)8,000 units and $500
D)500 units and $8,000

Question

Bear Publishing sells a nature guide.The following information was reported for a typical month:  What is Bear's current break-even point in unit and dollars?
A)1,100 units and $17,600 
B)1,100 units and $8,000 
C)8,000 units and $500 
D)500 units and $8,000

Quizplus · Accepted Answer

CM ratio = Contribution margin ÷ Sales
= $7,920 ÷ $17,600 = 0.45
Dollar sales to break even = Fixed expenses ÷ CM ratio
= $3,600 ÷ 0.45 = $8,000
Unit sales to break even = $8,000 ÷ $16.00 per unit = 500 units

Bear Publishing Sells a Nature Guide