Homework SourseMounts Corporation produces and sells two products In the mo
Mounts Corporation produces and sells two products. In the most recent month, Product I05L had sales of $42,000 and variable expenses of $11,880. Product P42T had sales of $55,000 and variable expenses of $15,280. The fixed expenses of the entire company were $46,170. The break-even point for the entire company is closest to: (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)
A. $73,330
B. $46,170
C. $64,125
D. $64,085
| Mounts Corporation produces and sells two products. In the most recent month, Product I05L had sales of $42,000 and variable expenses of $11,880. Product P42T had sales of $55,000 and variable expenses of $15,280. The fixed expenses of the entire company were $46,170. The break-even point for the entire company is closest to: (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.) A. $73,330 B. $46,170 C. $64,125 D. $64,085 |
Solution
Answer:C. $64,125
CM ratio=(CM/Sales)*100
=(69840/97000)*100=72%
BEP=Fixed expenses/CM ratio
=$46170/0.72
=$64125
| Particulars | Product 105L | Product P42T | Company |
| Sales | 42000 | 55000 | 97000 |
| Variable expenses | 11880 | 15280 | 27160 |
| Contribution | 30120 | 39720 | 69840 |
