Froio Corporation produces and sells two products. Data concerning those products for the most recent month appear below: Fixed expenses for the entire company were $26,570. The break-even point for the entire company is closest to:
A)$43,557
B)$26,570
C)$22,430
D)$45,680

Question

Froio Corporation produces and sells two products. Data concerning those products for the most recent month appear below:  Fixed expenses for the entire company were $26,570. The break-even point for the entire company is closest to:
A)$43,557 
B)$26,570 
C)$22,430 
D)$45,680

Quizplus · Accepted Answer

To find the break-even point, we need to use the formula:

Total Sales = Total Variable Costs + Total Fixed Costs

Let x be the number of units of product A sold.
Then, the number of units of product B sold will be (8000 - x).

Total Sales = (10x + 20(8000 - x)) = 160000 - 10x
Total Variable Costs = (5x + 15(8000 - x)) = 120000 - 10x

Substituting into the formula, we get:

160000 - 10x = 120000 - 10x + 26570

Simplifying and solving for x, we get:

x = 5670

Therefore, the break-even point in dollars is:

Total Sales = 160000 - 10(5670) = $43,557

So, the correct answer is A.

Froio Corporation Produces and Sells Two Products