Street Company's fixed expenses total $150,000,its variable expense ratio is 60% and its variable expenses are $4.50 per unit.Based on this information,the break-even point in units is:

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Quizplus · Accepted Answer

CM ratio = 1 - Variable expense ratio = 1 - 0.60 = 0.40
Dollar sales to break even = Fixed expenses F1F1F1S1F1F1F10 CM ratio
= $150,000 F1F1F1S1F1F1F10 0.40 = $375,000
Variable expense ratio = Total variable expenses F1F1F1S1F1F1F10 Total dollar sales
0.60 = Total variable expenses F1F1F1S1F1F1F10 Total dollar sales
0.60 = $4.50 per unit F1F1F1S1F1F1F10 Unit sales F1F1F1S1F1F1F10 Selling price per unit F1F1F1S1F1F1F10 Unit sales
0.60 = $4.50 per unit F1F1F1S1F1F1F10 Selling price per unit
Selling price = $4.50 per unit F1F1F1S1F1F1F10 0.60 = $7.50 per unit
Dollar sales = Unit selling price F1F1F1S1F1F1F10 Unit sales
$375,000 = $7.50 per unit F1F1F1S1F1F1F10 Unit sales
Unit sales = $375,000 F1F1F1S1F1F1F10 $7.50 per unit = 50,000 units

Street Company's Fixed Expenses Total $150,000,its Variable Expense Ratio Is