A manufacturer of cedar shingles has supplied the following data: The company's break-even in unit sales is closest to:

Question

A manufacturer of cedar shingles has supplied the following data:  The company's break-even in unit sales is closest to:

Quizplus · Accepted Answer

Contribution margin = Sales - Variable expenses
= $2, 072, 000 - ($1, 134, 000 + $238, 000)
= $2, 072, 000 - $1, 372, 000 = $700, 000
Unit CM = $700, 000 ÷ 280, 000 bundles = $2.50 per bundle
Unit sales to break even = Fixed expenses ÷ Unit CM
= $2, 072, 000 - ($1, 134, 000 + $280, 000)
= $600, 000 ÷ $2.50 per bundle = 240, 000 bundles

A Manufacturer of Cedar Shingles Has Supplied the Following Data