Belle Corp.has a selling price of $50 per unit,variable costs of $40 per unit,and fixed costs of $100,000.What sales revenue is needed to break-even?
A)$500,000
B)$125,000
C)$5,000,000
D)$1,000,000

Question

Quizplus · Accepted Answer

The break-even point in sales dollars can be calculated using the formula: Break-even point = Fixed Costs / (1 - Variable Costs/Selling Price). Plugging in the given numbers: $100,000 / (1 - $40/$50) = $100,000 / (1 - 0.8) = $100,000 / 0.2 = $500,000.