Final answer:
Wallace, Inc., prepared the following budgeted data based on a sales forecast of $6,000,000 then the break-even point is $4,000,000. Thus option C is correct.
Step-by-step explanation:
To determine the break-even point in sales dollars, we can use the formula:
Break-even sales = Fixed Costs / Contribution Margin Ratio
Given the sales forecast is $6,000,000 and there is no information provided about the variable costs or contribution margin ratio, we cannot directly calculate the break-even point. However, the break-even point occurs when the total revenue equals total costs, meaning no profit or loss is incurred.
The break-even point can be estimated using the sales forecast of $6,000,000. At this point, the total revenue will be equal to total costs (variable costs + fixed costs). As the question doesn't provide the variable costs or the contribution margin ratio, it's difficult to perform an exact calculation. But based on the given choices, the closest estimate to the break-even sales dollars appears to be $4,000,000.
Considering the choices provided (A. $2,250,000, B. $3,500,000, C. $4,000,000, D. $5,300,000), $4,000,000 seems the most reasonable as it's a point where the company neither makes a profit nor incurs a loss. Without specific variable costs or contribution margin ratio, this estimation aligns best with the break-even scenario in this context.
Please note that the exact break-even point calculation would require more information about the variable costs and contribution margin ratio, but based on the given options, $4,000,000 seems to be the most plausible estimate for the break-even sales dollars. Therefore option C is correct.