Dividing total fixed costs by the contribution margin ratio yields break-even point in sales dollars.

Name: Dividing total fixed costs by the contribution margin ratio yields break-even point in sales dollars.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This statement is true. The break-even point in sales dollars can be calculated by dividing total fixed costs by the contribution margin ratio. This will give the amount of sales revenue necessary to cover all fixed costs and reach the break-even point.

Dividing Total Fixed Costs by the Contribution Margin Ratio Yields