Question

A company has fixed costs of $96,800. Its contribution margin ratio is 44% and the product sells for $61 per unit.

What is the company's break-even point in dollar sales?

Answer 1

$220,000

Step-by-step explanation:

Calculation for the company's break-even point in dollar sales

Using this formula

Break-Even point in dollars sales= Fixed Costs ÷ Contribution Margin

Let plug in the formula

Break-Even point in dollars sales=$96,800/44%

Break-Even point in dollars sales=$220,000

Therefore the company's break-even point in dollar sales will be $220,000.