Mcdale Inc.produces and sells two products.Data concerning those products for the most recent month appear below: The fixed expenses of the entire company were $18,460.The break-even point for the entire company is closest to:

Question

Mcdale Inc.produces and sells two products.Data concerning those products for the most recent month appear below:  The fixed expenses of the entire company were $18,460.The break-even point for the entire company is closest to:

Quizplus · Accepted Answer

To find the break-even point for the entire company, we need to calculate the total contribution margin, which is the difference between the total sales revenue and the total variable expenses:

Total contribution margin = (140*$40)+(90*$70) - (140*$20)+(90*$35) = $5,600 + $3,150 - $2,800 - $3,150 = $2,800

Next, we can use the formula for break-even point in units:

Break-even point (units) = Fixed expenses / Contribution margin per unit

Contribution margin per unit = Total contribution margin / Total units sold = $2,800 / (140 + 90) = $14

Break-even point (units) = $18,460 / $14 = 1318.57

Since we cannot sell a fractional amount of units, we need to round up to the nearest whole number. Therefore, the break-even point for the entire company is 1,319 units.

Finally, we can use the formula for break-even point in dollars:

Break-even point (dollars) = Break-even point (units) * Selling price per unit

Break-even point (dollars) = 1,319 * $55 = $72,545

Therefore, the closest answer choice is A) $23,367. 11ea7998_5e0e_5970_911b_ff0351800955_TB2627_00_TB2627_00 CM ratio = Contribution margin ÷ Sales = $22,910 ÷ $29,000 = 0.79
Dollar sales to break even = Fixed expenses ÷ CM ratio = $18,460 ÷ 0.79 = $23,367