Reference: 08-12
Junsin Corporation's budget for next year appears below. The budget assumes the company will sell 30,000 units. $$\begin{array} { | c | l | l | }
\hline \text { Sales } & & \$ 600,000 \
\hline \text { Less expenses: } & & \
\hline \text { Variable } & \$ 390,000 & \
\hline \text { Fixed } & 140,000 & 530,000 \
\hline \text { Net income } & & \$ 70,000 \
\hline
\end{array}$$
-The break-even point in annual sales dollars is?

Question

Reference: 08-12
Junsin Corporation's budget for next year appears below. The budget assumes the company will sell 30,000 units. $$\begin{array} { | c | l | l | } 
\hline \text { Sales } & & \$ 600,000 \
\hline \text { Less expenses: } & & \
\hline \text { Variable } & \$ 390,000 & \
\hline \text { Fixed } & 140,000 & 530,000 \
\hline \text { Net income } & & \$ 70,000 \
\hline
\end{array}$$
-The break-even point in annual sales dollars is?

Quizplus · Accepted Answer

To find the break-even point in sales dollars, we first calculate the contribution margin ratio. The contribution margin is Sales - Variable Expenses = $600,000 - $390,000 = $210,000. The contribution margin ratio is Contribution Margin / Sales = $210,000 / $600,000 = 0.35. The break-even point in sales dollars is Fixed Expenses / Contribution Margin Ratio = $140,000 / 0.35 = $400,000.

Reference: 08-12 Junsin Corporation's Budget for Next Year Appears Below

Reference: 08-12
Junsin Corporation's Budget for Next Year Appears Below