Question

Mauro Products distributes a single product, a woven basket whose selling price is $19 per unit and whose variable expense is $15 per unit. The company’s monthly fixed expense is $6,800.

Required:

1. Calculate the company’s break-even point in unit sales.

2. Calculate the company’s break-even point in dollar sales. (Do not round intermediate calculations.)

3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.)

1.	Break-even point in unit sales		baskets
2.	Break-even point in dollar sales
3.	Break-even point in unit sales		baskets
	Break-even point in dollar sales

Answer 1

Particular	Current Sitution	If Fixed Cost Increase by $600
Selling price	19	19
Variable Expenses	15	15
Contribution per unit	4	4
(19-15)	(19-15)
Fixed Cost (Note 1)	6800	7400
Break Even Point unit (Note 2)	1700	1850
Break Even Point in value (Note 3)	2850.0	35150.0

Note 1
If Fixed cost increase by $600	Amount
Current Fixed	6800
Increase By $600	600
Total	7400

Note 2
Breaken Eeven Point	Current Sitution	If Fixed Cost Increase by $600
Fixed cost (A)	6800	7400
Contribution (B)	4	4
Not of Units	1700	1850

Note 3
Breaken Eeven Point	Current Sitution	If Fixed Cost Increase by $600
Fixed cost (A)	600	7400
Profit Volume Ratio(B) {(Sale- Variable cost)/Sale}	21.05263	21.05263
	{(19-15)/19}*100	{(19-15)/19}*100
Value	2850.0	35150.0