Rider Company sells a single product.The product has a selling price of $40 per unit and variable expenses of $15 per unit.The company's fixed expenses total $30,000 per year.The company's break-even point in terms of total dollar sales is:

Question

Quizplus · Accepted Answer

CM ratio = Unit contribution margin F1F1F1S1F1F1F10 Unit selling price
= ($40 per unit - $15 per unit)F1F1F1S1F1F1F10 $40 per unit
= 0.625
Dollar sales to break even = Fixed expenses F1F1F1S1F1F1F10 CM ratio
= $30,000 F1F1F1S1F1F1F10 0.625
= $48,000

Rider Company Sells a Single Product