Question

Assume Company C's cost of sales and fulfillment are variable and that all other operating costs...

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
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Answer #1

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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