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Compute the break-even point for a single-product company.

Compute the break-even point for a single-product company.

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 16MC: Break-even for a multiple product firm. can be calculated by dividing total fixed costs by the...
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Learning Objective 05-P2: Compute the break-even point for a single-product company. Skip to question A company’s break-even point for a period is the sales volume at which total revenues equal total costs. To compute a break-even point in terms of sales units, we divide total fixed costs by the contribution margin per unit. To compute a break-even point in terms of sales dollars, divide total fixed costs by the contribution margin ratio. Cost-Volume-Profit Chart Current Time 0:00 / Duration 1:56 1x Knowledge Check 01 Based on a CVP graph, select the correct drop-down answer for each question.
Required information Learning Objective 05-P2: Compute the break-even point for a single-product company. A company's break-even point for a period is the sales volume at which total revenues equal total costs. To compute a break-even point in terms of sales units, we divide total fixed costs by the contribution margin per unit. To compute a break-even point in terms of sales dollars, divide total fixed costs by the contribution margin ratio. Cost-Volume-Profit Chart Dollars Maximum productive capacity = 1,800 units Sales = $180,000 $1800,000 $160,000 $140,000 $120,000 $100,000 Largest Income = $30,000 $80,000 Maximum productive capacity = 1,800 units Break-Even Point (sales of 800 units or $80,000) Total Sales Total Costs
Transcribed Image Text:Required information Learning Objective 05-P2: Compute the break-even point for a single-product company. A company's break-even point for a period is the sales volume at which total revenues equal total costs. To compute a break-even point in terms of sales units, we divide total fixed costs by the contribution margin per unit. To compute a break-even point in terms of sales dollars, divide total fixed costs by the contribution margin ratio. Cost-Volume-Profit Chart Dollars Maximum productive capacity = 1,800 units Sales = $180,000 $1800,000 $160,000 $140,000 $120,000 $100,000 Largest Income = $30,000 $80,000 Maximum productive capacity = 1,800 units Break-Even Point (sales of 800 units or $80,000) Total Sales Total Costs
Required information 30s Dollars $1800,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 0 Maximum productive capacity = 1,800 units Break-Even Point (sales of 800 units or $80,000) Loss Area 200 400 0:00 / 1:56 Total Sales Total Costs Profit Area 600 800 1,000 1,200 1,400 1,600 1,800 Volume (units produced and sold Knowledge Check 01 Based on a CVP graph, select the correct drop-down answer for each question. CC B Line that starts at zero on the vertical axis with a slope based on the selling price per unit. Line that starts at the fixed cost level on the vertical axis and increases based on the slope of the variable cost per unit.
Transcribed Image Text:Required information 30s Dollars $1800,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 0 Maximum productive capacity = 1,800 units Break-Even Point (sales of 800 units or $80,000) Loss Area 200 400 0:00 / 1:56 Total Sales Total Costs Profit Area 600 800 1,000 1,200 1,400 1,600 1,800 Volume (units produced and sold Knowledge Check 01 Based on a CVP graph, select the correct drop-down answer for each question. CC B Line that starts at zero on the vertical axis with a slope based on the selling price per unit. Line that starts at the fixed cost level on the vertical axis and increases based on the slope of the variable cost per unit.
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