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The following data are available for the Phelps Corporation for a recent month: Product A Product B Product C Total Sales $ 150,000 $ 130,000 $ 90,000 $ 370,000 Variable expenses 91,000 104,000 27,000 222,000 Contribution margin $ 59,000 $ 26,000 $ 63,000 148,000 Fixed expenses 55,000 Net operating income $ 93,000 The break-even sales for the month for the company is closest to:

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Zviko

Answer:

$277,000

Explanation:

Break even is the point where neither profit nor a loss is made by the company.

Determination of Break-even Sales

Sales - Variable Expenses - Fixed Expenses = 0

Therefore, Solving Algebraically

Sales = Variable Expenses + Fixed Expenses

         = 222,000 + 55,000

         = 277,000

Therefore Break-even sales for the month for the company is closest to $277,000

Answer:

$137,500

Explanation:

Break-even sales = fixed expense / cm ratio

(cm ratio = cm / sales: 148,000 / 370,000 = 0.4 or 40%)

Therefore:

Break-even sales = fixed expense (55,000) / cm ratio (0.4) = 137,500

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