A manufacturer of cedar shingles has supplied the following data:

-The company's break-even in unit sales is closest to:

Question

A manufacturer of cedar shingles has supplied the following data:
 
-The company's break-even in unit sales is closest to:

Quizplus · Accepted Answer

Contribution margin = Sales - Variable expenses
= $2,412,000 - ($1,170,000 + $414,000)
= $2,412,000 - $1,584,000 = $828,000
Unit CM = $828,000 ÷ 360,000 bundles = $2.30 per bundle
Fixed expenses = $714,000 + $82,000 = $796,000
Unit sales to break even = Fixed expenses ÷ Unit CM
= $796,000 ÷ $2.30 per bundle = 346,087 bundles

A Manufacturer of Cedar Shingles Has Supplied the Following Data