Preyer Corporation produces and sells a single product.Data concerning that product appear below: The break-even in monthly dollar sales is closest to:

Question

Preyer Corporation produces and sells a single product.Data concerning that product appear below:  The break-even in monthly dollar sales is closest to:

Quizplus · Accepted Answer

CM ratio = Unit contribution margin ÷ Unit selling price
= ($230.00 per unit - $48.30 per unit)÷ $230.00 per unit
= $181.70 per unit ÷ $230.00 per unit = 0.79
Dollar sales to break even = Fixed expenses ÷ CM ratio
= $492,407 ÷ 0.79
= $623,300

Preyer Corporation Produces and Sells a Single Product