Which of the following expressions can be used to calculate break-even sales revenue with the contribution-margin ratio (CMR)?
A) CMR/fixed costs.
B) CMR * fixed costs.
C) Fixed costs/ CMR.
D) (Fixed costs + variable costs) *CMR.
E) (Sales revenue - variable costs) /CMR.

Question

Quizplus · Accepted Answer

The correct formula to calculate break-even sales revenue using the contribution-margin ratio (CMR) is fixed costs divided by CMR. This is because break-even occurs when total sales revenue equals total costs (fixed and variable), and the CMR is used to determine what portion of sales revenue is actually contributing to covering fixed costs after variable costs have been accounted for.

Which of the Following Expressions Can Be Used to Calculate