Assume Company C's cost of sales and fulfillment are variable and that all other operating costs are fixed, what is their sales breakeven value? Use 4 digits for v (v=V/P).
Total Net Sales | 177,866 |
Operating Costs: | |
Cost of sales | 111,934 |
Fulfillment | 25,249 |
Marketing | 10,069 |
Technology | 22,620 |
Administrative | 3,674 |
Other costs, net | 214 |
Total operating costs | 173,760 |
Break Even Sales =
Cost To Sales Ratio =
Sales - Variable cost = Contribution Margin, and Cost to sales Ratio is also known as Contribution Margin Ratio.
Here Net Sales = 177866
Variable cost = Cost of Sales + Fulfillment
= 111934 + 25249
= 137183
Fixed Cost = Marketing + Technology + Administrative + Other costs,net
= 10069+22620+3674+214
= 36577
Contribution Margin = 177866-137183
= 40683
Cost to Sales Ratio= (40683 / 177866) * 100
= 22.87%
Break Even Sales Value = 36577 / 22.87%
= 159934.41
Break Even Sales value = 159934.41
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