Assume the following information: $\begin{array}{lr}
\text { Variable cost ratio } & 80 \% \
\text { Total fixed costs } & \$ 60,000
\end{array}$ What volume of sales dollars is needed to break even?

Question

Quizplus · Accepted Answer

To break even, total sales must cover both variable and fixed costs. With a variable cost ratio of 80%, the contribution margin ratio is 20% (100% - 80%). To cover $60,000 in fixed costs, sales must be $60,000 / 0.20 = $300,000.

Assume the Following Information Variable cost ratio 80% Total fixed costs $60,000\begin{array}{lr}\text { Variable cost ratio } & 80 \% \\\text { Total fixed costs } & \$ 60,000\end{array} Variable cost ratio Total fixed costs ​80%$60,000​

Assume the Following Information $\begin{array}{lr}\text { Variable cost ratio } & 80 \% \\\text { Total fixed costs } & \$ 60,000\end{array}$