Question

Wheat Inc. produces and sells a single product. The selling price of the product is $240.00 per unit and its variable cost is $88.80 per unit. The fixed expense is $374,598 per month. The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Answer:

Break-even point in dollars=  $594.6

Explanation:

Giving the following information:

Wheat Inc. produces and sells a single product.

The selling price of the product is $240.00 per unit

The variable cost is $88.80 per unit.

The fixed expense is $374,598 per month.

Break-even point in dollars= fixed costs/ contribution margin ratio

contribution margin ratio= (price - variable costs)/price

contribution margin ratio= (240 - 88)/240= 0.63

Break-even point in dollars= 374.598/0.63= $594.6