Banta Corporation is in the business of selling computers. The following expense
ID: 2432711 • Letter: B
Question
Banta Corporation is in the business of selling computers. The following expenses were incurred in March? 2017:
Fixed manufacturing costs
?$90,000
Fixed nonmanufacturing costs
?$55,000
Unit selling price
?$1,500
Variable manufacturing cost
?$800
Units produced
?1,600
What will be the breakeven point if variable costing is? used? (Round your final answer up to the next whole? unit.)
A.
182 units
B.
97 units
C.
129 units
D.
208 units
Fixed manufacturing costs
?$90,000
Fixed nonmanufacturing costs
?$55,000
Unit selling price
?$1,500
Variable manufacturing cost
?$800
Units produced
?1,600
Explanation / Answer
Answer . D. 208 units
Explanation :
Contribution per unit = Unit selling price - Variable manufacturing cost = $1,500 - $800 = $700
Total fixed costs = Fixed manufacturing costs + Fixed non manufacturing costs
= $90,000 + $55,000 = $145,000
Breakeven point in units = Total fixed costs / Contribution per unit
= $145,000 / $700 = 207.14 or 208 units
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