(Break-even point) Diamond Jim’s makes and sells class rings for local schools. Operating information is as follows:
Selling price per ring
$600
Variable cost per ring
Rings and stones
$220
Sales commissions
48
Overhead
32
Annual fixed cost
Selling expenses
$180,000
Administrative expenses
105,000
Manufacturing
60,000
a. What is Diamond Jim’s break-even point in rings?
b. What is Diamond Jim’s break-even point in sales dollars?
c. What would Diamond Jim’s break-even point be if sales commissions increased to $54?
d. What would Diamond Jim’s break-even point be if selling expenses decreased by $6,000?