Question

question 5
maddalon international, inc. produces and sells a single product. the product sells for $160.00 per unit, and its variable expense is $46.40 per unit. the companys monthly fixed expense is $219,248
required:
whats the monthly break - even in total dollar sales?

Explanation:

Step1: Calculate contribution margin per unit

Contribution margin per unit = Selling price per unit - Variable expense per unit
\(= 160 - 54.40 = 105.6\) dollars per unit

Step2: Calculate contribution margin ratio

Contribution margin ratio = (Contribution margin per unit / Selling price per unit)
\(= \frac{105.6}{160} = 0.66\)

Step3: Calculate break - even sales in dollars

Break - even sales (dollars)= Fixed expenses / Contribution margin ratio
\(= \frac{219248}{0.66}=332209.09\) (approx)

Answer:

The monthly break - even in total dollar sales is approximately \(\$332209.09\)