Malensek International, Inc., produces and sells a single product. The product sells for $240.00 per unit and its variable expense is $55.20 per unit. The company's monthly fixed expense is $249,480. Required:Determine the monthly break-even in total dollar sales.
What will be an ideal response?
| Per Unit | Percent of Sales | |||||
| Selling price per unit | $ | 240.00 | 100 | % | ||
| Variable expense per unit | 55.20 | 23 | % | |||
| Contribution margin per unit and contribution margin ratio | $ | 184.80 | 77 | % | ||
Dollar sales to break even = Fixed expenses ÷ CM ratio = $249,480 ÷ 0.77 = $324,000
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