Schlender Corporation produces and sells two products. In the most recent month, Product L40O had sales of $22,000 and variable expenses of $8,580. Product Y27L had sales of $49,000 and variable expenses of $17,690. The fixed expenses of the entire company were $43,950.
-The break-even point for the entire company is closest to:

Question

Quizplus · Accepted Answer

To find the break-even point for the entire company, we need to add up the fixed costs and then divide by the contribution margin ratio.

Total fixed costs = $90,000 + $75,000 + $50,000 + $25,000 = $240,000

Total contribution margin ratio = ($70 - $30) / $70 = 0.57

Break-even point = $240,000 / 0.57 = $420,000 / 2 = $210,000

Therefore, the closest option to the break-even point for the entire company is $69,762 (option C).

Schlender Corporation Produces and Sells Two Products