Question

Karen tells her friend Judi that she plans to shave her dog's long hair so short Judi will be able to see the freckles on his skin. Judi feels so bad for the dog that she offers to pay Karen $50 to have a professional dog groomer cut the dog's hair to a more attractive length and style. Judi's promise to pay is_________.

Answer 1

The equation to determine break-even sales dollars is Break-even sales = Fixed costs / Contribution margin ratio. This equation allows you to calculate the sales needed to cover all fixed costs and reach the breakeven point.

Step-by-step explanation:

To determine the sales dollars needed to attain a breakeven point (target profit of 0), you can use the equation: Break-even sales = Fixed costs / Contribution margin ratio.

The contribution margin ratio is calculated by subtracting variable costs from sales revenue and dividing by sales revenue. The fixed costs are the costs that do not change with the level of production.

The equation to determine break-even sales dollars is Break-even sales = Fixed costs / Contribution margin ratio. This equation allows you to calculate the sales needed to cover all fixed costs and reach the breakeven point.

For example, if your fixed costs are $10,000 and the contribution margin ratio is 0.5, the break-even sales dollars would be $20,000. This means that you need to collect $20,000 in sales to cover all your fixed costs and reach the breakeven point.