Assume a company sells a single product. If Q equals the level of output, P is the selling price per unit, V is the variable expense per unit, and F is the fixed expense, then the break-even point in sales dollars is:
A)F/(P-V).
B)F/[Q(P-V)].
C)F/[Q(P-V)/P].
D)F/[(P-V)/P].

Question

Quizplus · Accepted Answer

The break-even point in sales dollars is calculated by dividing the fixed expenses by the contribution margin ratio, which is (P-V)/P.

Assume a Company Sells a Single Product