Dorian Company Produces and Sells a Single Product

question 106

Multiple Choice

Dorian Company produces and sells a single product. The product sells for $60 per unit and has a contribution margin ratio of 40%. The company's monthly fixed expenses are $28,800.


-What is the break-even point in sales dollars?

• A) $48,000.
• B) $72,000.
• C) $28,800.
• D) $0.

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Definitions:

Double Coincidence

Double Coincidence is a term used in economics to describe a situation where two parties each hold an item the other wants, allowing for an exchange without the need for a common medium of trade, like money.

Barter System

An ancient method of exchange where goods and services are traded directly for other goods and services without using money.

Trade

The exchange of goods, services, or both between two or more parties, either within a country or across international borders.

Commodity Money

Anything that serves both as money and as a commodity; money that has intrinsic value such as gold or silver coins.