Problem:
Maxson Products distributes a single product, a woven basket whose selling price is $20 and whose variable cost is $15.8 per unit. The company's monthly fixed expense is $12,180.
Required:
Question 1: Compute for the company's break-even point in sales dollars using the equation method and the CM ratio.
Question 2: Compute for the company's break-even point in sales dollars using formula method and the CM ratio.
Note: Show all workings.