E6-10 Analyzing Break-Even Point, Preparing CVP Graph [LO 6-1] Dana’s Ribbon Wor

Question

E6-10 Analyzing Break-Even Point, Preparing CVP Graph [LO 6-1]

Dana’s Ribbon World makes award rosettes. Following is information about the company:

Required:
1. Determine how many rosettes Dana’s must sell to break even. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.)

2. Calculate the break-even point in sales dollars. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Variable cost per rosette $ 1.15 Sales price per rosette 2.30 Total fixed costs per month 895.00 Variable cost per rosette $ 1.15 Sales price per rosette 2.30 Total fixed costs per month 895.00

Required:
1. Determine how many rosettes Dana’s must sell to break even. (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.)

Break-Even Units Rosettes

Explanation / Answer

1. Break even point = Total fixed costs per month / (Sales price per rosette - Variable cost per rosette)

= $895.00 / ($2.30 - $1.15)

= 778 Rosettes

2. Break-Even Sales Dollars = 778 Rosettes × $2.30 = $1,790

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