COST ACCOUNTING
COST VOLUME PROFIT ANALYSIS
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Question
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A company makes and sells a single product. When sales per month are $6.8 million, total costs are $6.56 million. When sales per month are $5.2 million, total costs are $5.44 million. There is a step cost increase of $400, 000 in fixed costs when sales are $6.0 million, but variable unit costs are constant at all levels of output and sales. What is the breakeven point for sales revenue per month?
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$6.0 million
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There are two breakeven points:$5.64 million and $6.36 million
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$5.64 million only
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$6.36 million only
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Explanation:
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