In 2016, Teller Company sold 3,000 units at $600 each. Variable expenses were $420 per unit,...
In 2016, Teller Company sold 3,000 units at $600 each. Variable expenses were $420 per unit, and fixed expenses were $270,000. The same selling price, variable expenses, and fixed expenses are expected for 2017. What is Teller's break-even point in sales dollars for 2017?
A) $900,000
B) $2,700,000
C) $1,800,000
D) $2,571,429
Homework Answers
Contribution margin=Sales-Variable cost
=(600-420)=$180 per unit
Contribution margin ratio=Contribution margin/Sales
=(180/600)=0.3
Breakeven=Fixed expenses/Contribution margin ratio
=270,000/0.3
=$900,000
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