If fixed costs are $75,000 and the CM ratio is 50% then breakeven point is $37,500.

Name: If fixed costs are $75,000 and the CM ratio is 50% then breakeven point is $37,500.
Brand: Quizplus
Rating: 4.9 (41 reviews)

Question

Quizplus · Accepted Answer

The breakeven point in sales dollars can be calculated by dividing the fixed costs by the contribution margin ratio (CM ratio). Therefore, with fixed costs of $75,000 and a CM ratio of 50%, the breakeven point would be $75,000 / 0.50 = $150,000, not $37,500.

If Fixed Costs Are $75,000 and the CM Ratio Is