Everton Furniture Company produces two kinds of chairs: an oak model and a chestnut wood model. The oak model sells for £60 and the chestnut wood model sells for £100. The variable expenses are as follows:
-Expected sales in units next year are: 5,000 oak chairs and 1,000 chestnut chairs. Fixed expenses are budgeted at £135,000 per year. The yearly break-even point in total sales for the expected sales mix is:

Question

Quizplus · Accepted Answer

The break-even point is calculated by dividing the fixed expenses by the contribution margin ratio. The correct choice is based on the given fixed expenses and the expected sales mix.

Everton Furniture Company Produces Two Kinds of Chairs: an Oak