BRIEF EXERCISE 8-4

Computing the Break-Even Point[LO2-CC6]

Mauro Products has a single product, a woven basket whose selling price is $54, and variable cost is $45 per unit. The company's monthly fixed expenses are $26,550.

1. Compute the company's break-even point in unit sales using the equation method.
2. Compute the company's break-even point in sales dollars using the equation method and the CM ratio.
3. Compute the company's break-even point in unit sales using the contribution margin method.
4. Compute the company's break-even point in sales dollars using the contribution margin method and the CM ratio.

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BRIEF EXERCISE 8-5

Preparing a CVP Graph[LO1-CC4]

Karlik Enterprises has a single product, whose selling price is $24, and variable cost is $18 per unit. The company's monthly fixed expenses are $24,000.

1. need a CVP graph for the company up to a sales level of 8,000 units.
2. Estimate the company's break-even point in unit sales using your CVP graph.