Peggy’s Ribbon World makes award rosettes. Following is information about the company:

Peggy’s Ribbon World makes award rosettes. Following is information about the company:

Variable cost per rosette	$	1.23
Sales price per rosette		2.40
Total fixed costs per month		882.00

Requirement 1:

Determine how many rosettes Peggy’s must sell to break even. (Round your intermediate calculations to 2 decimal places and final answer up to next whole number.)

Break-even units

754  rosettes

Requirement 2:

Calculate the break-even point in sales dollars. (Use rounded break-even units calculated above. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Break-even sales dollars

$ 1,809.23

 Explanation:

1.
Unit contribution margin	=	Sales price – Variable cost per unit
	=	$2.40 – $1.23
	=	$1.17

 

Break-even units	=	Total fixed costs / Unit contribution margin
	=	$882 / $1.17
	=	754 rosettes

 

2.

Break-even sales dollars	=	Break-even units × Sales price
	=	754 × $2.40 = $1,809.60