Consider the income statement for Bayless Company: What is the break-even point in sales dollars (rounded to the nearest dollar)?
A)$264,063
B)$92,308
C)$160,000
D)$240,000

Question

Consider the income statement for Bayless Company:  What is the break-even point in sales dollars (rounded to the nearest dollar)?
A)$264,063 
B)$92,308 
C)$160,000 
D)$240,000

Quizplus · Accepted Answer

The break-even point in sales dollars can be calculated using the formula: 
Break-even point = Fixed costs / (1 - (Variable costs / Sales))
In this case, the fixed costs are $80,000, and the variable costs are $0.60 per dollar of sales (60% of sales). 
Substituting these values into the formula: 
Break-even point = $80,000 / (1 - (0.60)) = $160,000 
Therefore, the break-even point in sales dollars is $160,000.

Consider the Income Statement for Bayless Company: What Is