Company A's fixed costs were Rs 45,012, its variable costs were Rs 24,000, and its sales were Rs 80,012. Required: Find company's break-even point in sales-dollars? Immersive Reader
Fixed costs = Rs 45,012
Variable costs = Rs 24,000
Sales = Rs 80,012
Break-even point in sales-dollars = ?
Contribution margin = Sales - Variable costs
= 80,012 - 24,000
= $56,012
Contribution margin ratio = Contribution margin/Sales
= 56,012/80,012
= 70% (rounded to whole percentage)
Break even sales in dollars = Fixed cost/Contribution margin ratio
= 45,012/70%
= Rs. 64,303 (rounded to whole Rs.)
Note. Exact answer may slightly differ due to rounding off.
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