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Company A's fixed costs were Rs 45,012, its variable costs were Rs 24,000, and its sales...

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

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Answer #1

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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