Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. Data concerning these products appear below:
Velcro Metal Nylon
Normal annual sales volume 100,000 200,000 400,000
Unit selling price $1.65 $1.50 $0.85
Variable cost per unit $1.25 $0.70 $0.25
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Total fixed expenses are $400,000 per year.
All three products are sold in highly competitive markets, so the company is unable to raise its prices without losing unacceptable numbers of customers.
The company has an extremely effective lean production system, so there are no beginning or ending work in process or finished goods inventories.
Requirement 1:
What is the company's over-all break-even point in total sales dollars?
Break-even point in total sales dollars $