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Let's go through the problem step by step:

### Given:
- Selling price per unit = $26
- Variable cost per unit = $22
- Fixed expenses per month = $5,200

### Formulas:

1. **Break-even point in unit sales**:
   \[
   \text{Break-even units} = \frac{\text{Fixed Expenses}}{\text{Selling Price} - \text{Variable Cost}}
   \]
2. **Break-even point in dollar sales**:
   \[
   \text{Break-even sales (in dollars)} = \text{Break-even units} \times \text{Selling Price}
   \]
3. **With a $600 increase in fixed expenses**, new fixed expenses = $5,200 + $600 = $5,800. The formulas for calculating the new break-even points remain the same.

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Let me calculate these values.### Calculations:

1. **Break-even point in unit sales**: 1,300 baskets.
2. **Break-even point in dollar sales**: $33,800.
3. **With a $600 increase in fixed expenses**:
   - New break-even point in unit sales: 1,450 baskets.
   - New break-even point in dollar sales: $37,700.

Would you like more details on the calculations, or do you have any questions?

Here are some related questions:
1. How does the contribution margin impact the break-even analysis?
2. How would changes in the selling price affect the break-even point?
3. What is the significance of the margin of safety in this context?
4. How can the company reduce its break-even point?
5. How would variable costs influence profitability?

**Tip**: The break-even point is highly sensitive to changes in fixed costs, selling prices, and variable costs, making it essential for companies to manage these factors carefully.

Mauro Products distributes a single product, a woven basket whose selling price is $26 per unit and whose variable expense is $22 per unit. The company's monthly fixed expense is $5,200. Required:
1. Calculate the company’s break-even point in unit sales.
2. Calculate the company’s break-even point in dollar sales.
3. If the company’s fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales?

Learn how to calculate the break-even point for Mauro Products, which sells woven baskets. This problem uses cost-volume-profit analysis to determine break-even points in units and dollar sales. It includes how fixed expenses of $5,200 and $600 increases affect the calculations. Selling price per unit is $26 and variable cost is $22.

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