If the selling price per unit is $25.00, the variable expense per unit is $5.00, and the breakeven sales in dollars is $467,000, what are total fixed expenses? (Round unit amounts up to the nearest unit and round your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

The breakeven sales in dollars can be calculated using the formula:

Breakeven Sales = Fixed Expenses / Contribution Margin Ratio

where Contribution Margin Ratio = (Selling Price per unit - Variable Expense per unit) / Selling Price per unit

Plugging in the given values:

$467,000 = Fixed Expenses / ((25-5)/25)

$467,000 = Fixed Expenses / 0.8

Fixed Expenses = $467,000 x 0.8

Fixed Expenses = $373,600

Therefore, the total fixed expenses are $373,600.

If the Selling Price Per Unit Is $25