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

Question

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

Quizplus · Accepted Answer

Contribution margin = Sales - Variable expenses
= $1,950,000 - ($960,000 + $360,000)
= $1,950,000 - $1,320,000 = $630,000
Unit CM = $630,000 ÷ 300,000 kilograms = $2.10 per kilogram
Unit sales to break even = Fixed expenses ÷ Unit CM
= $498,000 ÷ $2.10 per kilogram = 237,143 kilograms

A Manufacturer of Tiling Grout Has Supplied the Following Data