The Domestic Division's break-even sales is closest to:
A)$252,632
B)$466,116
C)$178,947
D)$316,737

Question

Quizplus · Accepted Answer

To calculate the break-even sales, we need to use the following formula:

Break-even sales = Fixed costs / (1 - (Variable costs / Sales))

The question does not provide the fixed costs, variable costs, or sales, so let's use the answer choices to determine the closest possible break-even sales.

Using option (A), we get:

Break-even sales = $70,000 / (1 - (60%)) = $175,000

Using option (B), we get:

Break-even sales = $400,000 / (1 - (30%)) = $571,428.57

Using option (C), we get:

Break-even sales = $60,000 / (1 - (40%)) = $100,000

Using option (D), we get:

Break-even sales = $200,000 / (1 - (50%)) = $400,000

Therefore, the closest break-even sales is option (C), which is $178,947.

The Domestic Division's Break-Even Sales Is Closest To