Exercise 5-7 Compute the Break-Even Point [LO6]

Maxson Products distributes a single product, a woven basket whose selling price is $22 and whose variable cost is $16.5 per unit. The companys monthly fixed expense is $7,150.

Required:
1.	Compute for the companys break-even point in unit sales using the equation method.

Break-even point in unit sales

baskets

2.	Compute for the companys break-even point in sales dollars using the equation method and the CM ratio. (Do not round intermediate calculations. Round your CM ratio to 2 decimal places.)

CM ratio
Break-even point in dollar sales	$

3.	Compute for the companys break-even point in unit sales using the formula method.

Break-even point in unit sales

baskets

4.	Compute for the companys break-even point in sales dollars using formula method and the CM ratio.(Do not round intermediate calculations. Round your CM ratio to 2 decimal places.)

CM ratio
Break-even point in dollar sales	$