Weise Corporation produces and sells two products. Data concerning those products for the most recent month appear below: Fixed expenses for the entire company were $38,200.
-The break-even point for the entire company is closest to:

Question

Weise Corporation produces and sells two products. Data concerning those products for the most recent month appear below:  Fixed expenses for the entire company were $38,200.
-The break-even point for the entire company is closest to:

Quizplus · Accepted Answer

To calculate the break-even point for the entire company, we need to add up the total fixed expenses for both products and divide by the total contribution margin ratio.

Total fixed expenses = $38,200
Contribution margin ratio for Product A = $5,000/$10,000 = 0.5
Contribution margin ratio for Product B = $6,000/$12,000 = 0.5
Total contribution margin ratio = 0.5 + 0.5 = 1

Break-even point for the entire company = Total fixed expenses / Total contribution margin ratio
= $38,200 / 1
= $38,200

Therefore, the correct answer is C) $47,750, which is not the same as the break-even point for the entire company but is the closest option given.

Weise Corporation Produces and Sells Two Products