Question

If fixed costs are $900,000 and variable costs are 66% of sales, what is the break-even...

If fixed costs are $900,000 and variable costs are 66% of sales, what is the break-even point in sales dollars?

a.$2,647,059

b.$3,547,059

c.$594,000

d.$1,494,000

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Answer #1
Companywide Break-even point in dollar sales
*Break-even point($) =Total Fixed cost/Contribution margin ratio
Sales a 100%
Variable Cost b 66%
Contribution ratio c=a-b 34%
Fixed Cost d $     900,000
Break-even sales ($) e=d/c $ 2,647,059
The correct answer is Option (a) i.e. $26,47,059
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