Question

Last year a printing company had total sales of $37 500. The total of its variable costs was $ 15 000, and fixed costs were $18 000. Capacity is at sales maximum of $50 000.

Calculate the break-even point in:
(i) dollars of sales
(ii) as a percent of capacity

Answer 1

Break-even point in dollars of sales = $15000 + $18000 = $33,000
Break-even point as a percent of capacity = $33,000 / $50,000 x 100 = 66%