Meyerson’s bakery is considering the addition of a new line of pies to its product offerings. it is expected that each pie will sell for $15 and the variable costs per pie will be $9. total fixed operating costs are expected to be $25,000. meyerson’s faces a marginal tax rate of 35%, will have interest expense associated with this line of $3,500, and expects to sell about 4,200 pies in the first year. calculate the opeating break even point both in units and dollars.

Instructions are listed below

Explanation:

Giving the following information:

It is expected that each pie will sell for $15 and the variable costs per pie will be $9. Total fixed operating costs are expected to be $25,000. Meyerson’s faces a marginal tax rate of 35%, will have interest expense associated with this line of $3,500.

Break-even point (units)= fixed costs/ contribution margin

Break-even point (units)= (25000+3500)/(15-9)= 4750 units

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= (25000+3500)/[(15-9)/15]

Break-even point (dollars)= $71,250

answer is a

explanation:

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