Question: Selling price per unit (package of 2 CDs)...................................... $20.00 Variable costs per unit: Direct material............................................................................................................... $4.00 Direct labor...................................................................................................................... $5.00 Artist's royalties.............................................................................................................. $3.50 Manufacturing overhead.......................................................................................... $3.00

Selling price per unit (package of 2 CDs)......................................

$20.00

Variable costs per unit:

Direct material...............................................................................................................

$4.00

Direct labor......................................................................................................................

$5.00

Artist's royalties..............................................................................................................

$3.50

Manufacturing overhead..........................................................................................

$3.00

Selling expenses............................................................................................................

$1.00

Total variable costs per unit............................................................

$16.50

Annual fixed costs:

Manufacturing overhead..........................................................................................

$180,000

Selling and administrative.......................................................................................

$220,000

Total fixed costs................................................................................

$400,000

Forecasted annual sales volume (120,000 units).........................

$2,400,000

What is the company's break-even point in dollars?

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