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Wang Co. manufactures and sells a single product that sells for $450 per unit; variable costs...

Wang Co. manufactures and sells a single product that sells for $450 per unit; variable costs are $270 per unit. Annual fixed costs are $800,000. Current sales volume is $4,200,000. Compute the break-even point in dollars.

  • $1,740,000.

  • $2,000,000.

  • $1,304,348.

  • $4,202,899.

  • $2,640,000.

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Answer #1


Answer : $2000000

Calculated as

Break even sales in dollars = Fixed cost/Contribution margin

Contribution margin = (Sales- variable cost) x 100/Sales

= (450-270)*100/450

= 40%

Fixed Cost = $800000

Break even sales in dollars = $800000/40% = $2000000

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