Asked by Tyler Bergh on Jul 15, 2024
Verified
The break-even point in dollar sales is closest to:
A) $162,000
B) $117,000
C) $0
D) $173,700
Break-even Point
The point at which total revenue equals total costs and expenses, resulting in neither profit nor loss.
Dollar Sales
The total value of sales made by a business within a certain period, measured in dollars.
- Understand the concept and computation of break-even points in both sales units and dollar sales.
Verified Answer
NM
Nathan MarcusJul 19, 2024
Final Answer :
A
Explanation :
CM ratio = Contribution margin ÷ Sales = $63,000 ÷ $180,000 = 35%
Dollar sales to break even = Fixed expenses ÷ CM ratio = $56,700 ÷ 35% = $162,000
Dollar sales to break even = Fixed expenses ÷ CM ratio = $56,700 ÷ 35% = $162,000
Learning Objectives
- Understand the concept and computation of break-even points in both sales units and dollar sales.