Question

Delta Company sells mini-flash drives. The selling price is $10 each and the variable costs are $8. If fixed costs are $3,000, how much in sales dollars must Delta have to break even

Answer 1

Break-even point (dollars)= $15,000

Step-by-step explanation:

Giving the following information:

The selling price is $10 each and the variable costs are $8.

Fixed costs are $3,000.

To calculate the break-even point in dollars, we need to use the following formula:

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 3,000 / [(10 - 8)/10]

Break-even point (dollars)= $15,000