Malone Printing Company projected the following information for next year: $\begin{array}{lr}
\text { Selling price per unit } & \$ 75.00 \
\text { Contribution margin per unit } & \$ 30.00 \
\text { Total fixed costs } & \$ 120,000 \
\text { Tax rate } & 40 \%
\end{array}$
What is the break-even point in dollars?

Question

Malone Printing Company projected the following information for next year: $\begin{array}{lr}
\text { Selling price per unit } & \$ 75.00 \
\text { Contribution margin per unit } & \$ 30.00 \
\text { Total fixed costs } & \$ 120,000 \
\text { Tax rate } & 40 \%
\end{array}$
 What is the break-even point in dollars?

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing total fixed costs by the contribution margin per unit: $120,000 / $30 = 4,000 units. To find the break-even point in dollars, multiply the break-even point in units by the selling price per unit: 4,000 units * $75 = $300,000.

Malone Printing Company Projected the Following Information for Next Year