Dorian Company produces and sells a single product. The product sells for $60 per unit and has a contribution margin ratio of 40%. The company's monthly fixed expenses are $28,800.

-What is the break-even point in sales dollars?

Question

Dorian Company produces and sells a single product. The product sells for $60 per unit and has a contribution margin ratio of 40%. The company's monthly fixed expenses are $28,800.

-What is the break-even point in sales dollars?

Quizplus · Accepted Answer

The break-even point in sales dollars can be calculated using the formula: Break-even point in sales dollars = Fixed expenses / Contribution margin ratio. Given that the fixed expenses are $28,800 and the contribution margin ratio is 40% (or 0.40 when used in calculations), the break-even point is $28,800 / 0.40 = $72,000.

Dorian Company Produces and Sells a Single Product