The new Corina watch has an expected selling price per watch of $42, the projected variable cost per unit is $24, and estimated fixed costs per month are $24,120. The breakeven point in sales dollars is
A) $48,240.
B) $32,160.
C) $56,280.
D) $40,200.

Question

Quizplus · Accepted Answer

The formula to calculate the breakeven point in sales dollars is:

Breakeven Point = Fixed Costs / (1 - (Variable Costs / Sales Price))

Plugging in the given values, we get:

Breakeven Point = $24,120 / (1 - ($24 / $42)) = $56,280

Therefore, the answer is choice C.

The New Corina Watch Has an Expected Selling Price Per