Mauro Products has a single product, a woven basket whose selling price is $54, and variable cost

Question:

Mauro Products has a single product, a woven basket whose selling price is $54, and variable cost is $45 per unit. The company’s monthly fixed expenses are $26,550.

Required:

1. Compute the company’s break-even point in unit sales using the equation method.

2. Compute the company’s break-even point in sales dollars using the equation method and the CM ratio.

3. Compute the company’s break-even point in unit sales using the contribution margin method.

4. Compute the company’s break-even point in sales dollars using the contribution margin method and the CM ratio.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...

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