Question

ssume the following information: Variable cost ratio 80% Total fixed costs $60,000 What is the volume of sales dollars required to break even

Answer 1

Break-even point (dollars)= $300,000

Step-by-step explanation:

Giving the following information:

Variable cost ratio 80%

Total fixed costs $60,000

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

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

contribution margin ratio= 1 - 0.8= 0.2

Break-even point (dollars)= 60,000 / 0.2

Break-even point (dollars)= $300,000