Question

In: Accounting

Moyas Corporation sells a single product for $20 per unit. Last year, the company's sales revenue...

Moyas Corporation sells a single product for $20 per unit. Last year, the company's sales revenue was $300,000 and its net operating income was $24,000. If fixed expenses totaled $96,000 for the year, the break-even point in unit sales was:

  • 12,000 units

  • 9,900 units

  • 15,000 units

  • 14,100 units

Solutions

Expert Solution

Particulars Amount (in $ )
Sales
( 15,000 x $ 20)		 $ 300,000
Less: Variable Cost - Bal . Fig ($ 180,000)
Contribution Margin $ 120,000
Less: Fixed Cost ($ 96,000 )
Net operating income $ 24,000
Variable Cost per unit
= $ 180,000 / 15,000 Units		 $ 12
Contribution margin per Unit
      =   Selling Price (-) variable Expenses
      =    $ 20 (-) $ 12		 $ 8
Break-even point in unit sales
    = Fixed Costs / Contribution margin per Unit
    = $ 96,000 / $ 8		 12,000 Units
Break-even point in unit sales 12,000 Units
Option (a) is Correct

ekkarill92 answered 3 years ago
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