Question 37 of 43 37 Mauro Products distributes a single pro

Question 37 (of 43) 37. Mauro Products distributes a single product a woven basket whose seling price is $26 and whose variable expense is $20 54 per unit The company\'s monthly foed expense is $9,828 Required: 1. Sohve for the company\'s break-even point in unt sales using the equation mathod (Do not round your intermediate calculations.) baskets 2 Solve for the company\'s break -even point in dollar sales using the equation method and the CM ratio. Do not round intermediate calculations. Round \"CM ratio percent to nearest whole percent.) CM ratio Breakeven point dolar sales 3 Solve for the company\'s break-even point in unit sales using the formuía method (Do not round your intermediate calculations) baskets 4 Solve for the company\'s break even point in dollar sales using the formula method and the CM ratio (Do not round intermediate calculations. Round \"CM ratio percent to nearest whole percent.) CM raio Break -even point in dollar sales

Solution

Part 1

Profit = (unit CM *Q) – fixed expenses

Unit CM = sales – variable cost

Therefore,

0 = ((26-20.54)*Q)-9828

0=5.46Q -9828

5.46Q = 9828

Q = 9828/5.46

Q = 1800 baskets

PART 2

CM ratio = unit CM / unit selling price

CM ratio = (26-20.54)/26 = 0.21 = 21%

Profit = (CM ratio* sales)-fixed expense

0=(0.21*sales) -9828

0.21 sales = 9828

Sales = 9828/0.21 = $46800

PART 3

Unit sales to break even = fixed expense/ unit CM

Unit sales to break even = 9828/5.46 = 1800 baskets

PART 4

Dollars to break even = fixed expense/ CM ratio

Dollars to break even = 9828/0.21 = $46800