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    Maxson Products break-even using equation method

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    Maxson Products distributes a single product, a woven basket whose selling price is $8 and whose variable cost is $6 per unit. The company's monthly fixed expense is $5,500.

    Required:

    Solve for the company's break-even point in unit sales using the equation method.
    Solve for the company's break-even point in sales dollars using the equation method and the CM ratio.
    Solve for the company's break-even point in unit sales using the contribution margin method.
    Solve for the company's break-even point in sales dollars using the contribution margin method and the CM ratio.

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    https://brainmass.com/business/financial-ratios/maxson-products-break-even-using-equation-method-cm-ratio-contribution-margin-232033

    Solution Preview

    Solve for the company's break-even point in unit sales using the equation method. The equation method yields the break-even point in unit sales, Q, as follows:

    Sales = Variable expenses + Fixed expenses + Profits
    $8Q = $6Q + $5,500 + $0
    $2Q = $5,500
    Q = $5,500 ÷ $2 per basket
    Q = 2,750 baskets

    Solve for the company's break-even point in sales ...

    Solution Summary

    Maxson Products break-even using equation method are analyzed. The break-even point is discovered.

    $2.19

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