Madison Corporation sells three products (M, N, and O) in the following sales mix: 3:1:2. Unit price and cost data are:

Total fixed costs are $340,000. The break-even point in sales dollars for the current sales mix is (round to the nearest thousand):
A) $ 20,000.
B) $289,000.
C) $400,000.
D) $629,000.
E) $740,000.

Question

Madison Corporation sells three products (M, N, and O) in the following sales mix: 3:1:2. Unit price and cost data are:

Total fixed costs are $340,000. The break-even point in sales dollars for the current sales mix is (round to the nearest thousand):
A) $ 20,000. 
B) $289,000. 
C) $400,000. 
D) $629,000. 
E) $740,000.

Quizplus · Accepted Answer

11eaadfd_cd4d_7c97_95d8_91d369a93264_TB6948_00 
11eaadfd_cd4d_a3a8_95d8_8376fde850b9_TB6948_00 
Break-even point in dollar sales = $340,000/$20 = 17,000 composite units × $37 = $629,000

Madison Corporation Sells Three Products (M, N, and O) in the Following