At the current selling price of $170 per unit, what dollar volume of sales per month is required for Grand Gimmicks to break-even?

Question

Quizplus · Accepted Answer

Break-even point in units = fixed costs / contribution margin per unit
Fixed costs = $85,000
Contribution margin per unit = Selling price per unit - Variable cost per unit
Variable cost per unit = $30 + $40 + $12 = $82
Contribution margin per unit = $170 - $82 = $88
Break-even point in units = $85,000 / $88 = 965.91
Since a company cannot sell 0.91 of a unit, we must round up to 966 units.
Dollar volume of sales per month to break even = 966 units x $170 per unit = $164,220
Hence, the closest answer is C.

At the Current Selling Price of $170 Per Unit, What