If the sales price per unit is $100, the unit variable cost is $75, and total fixed costs are $150,000, then the break?even volume in dollar sales rounded to the nearest whole dollar is _____.
A)$600,000
B)$150,000
C)$200,000
D)$1,500

Question

Quizplus · Accepted Answer

The break-even volume in dollar sales is calculated by dividing the total fixed costs by the contribution margin ratio. The contribution margin per unit is the sales price per unit minus the unit variable cost, which is $100 - $75 = $25. The contribution margin ratio is the contribution margin per unit divided by the sales price per unit, which is $25 / $100 = 0.25 or 25%. Therefore, the break-even volume in dollar sales is $150,000 / 0.25 = $600,000.

If the Sales Price Per Unit Is $100, the Unit