Question

Menlo company distributes a single product. the company's sales and expenses for last month follow: total per unit sales $ 616,000 $ 40 variable expenses 431,200 28 contribution margin 184,800 $ 12 fixed expenses 148,800 net operating income $ 36,000 required: 1. what is the monthly break-even point in unit sales and in dollar sales?

Answer 1

The attached image shows the proper arrangement of the problem in this question.

Now;
Cash break-even point in unit sales = Fixed expenses/Contribution margin per unit = 148,800/12 = 12,400 units.

Cash break-even point in dollar sales = Break-even in unit sales * Sales per unit = 12,400*40 = $496,000