The following information pertains to Tiller Co.:
$$\begin{array} { l r }
\text { Sales } & \$ 800,000 \
\text { Variable Costs } & 160,000 \
\text { Fixed Costs } & 40,000
\end{array}$$
What is Tiller's break-even point in sales dollars? (CPA adapted)
A) $200,000
B) $160,000
C) $50,000
D) $40,000

Question

The following information pertains to Tiller Co.:
$$\begin{array} { l r } 
\text { Sales } & \$ 800,000 \
\text { Variable Costs } & 160,000 \
\text { Fixed Costs } & 40,000
\end{array}$$
What is Tiller's break-even point in sales dollars? (CPA adapted)
A) $200,000
B) $160,000
C) $50,000
D) $40,000

Quizplus · Accepted Answer

Break-even point = Fixed costs / Contribution margin ratio= 40,000 / (800,000 - 160,000) / 800,000= 40,000 / 0.8= $50,000

The Following Information Pertains to Tiller Co Sales $800,000 Variable Costs 160,000 Fixed Costs 40,000\begin{array} { l r } \text { Sales } & \$ 800,000 \\\text { Variable Costs } & 160,000 \\\text { Fixed Costs } & 40,000\end{array} Sales Variable Costs Fixed Costs ​$800,000160,00040,000​

The Following Information Pertains to Tiller Co $\begin{array} { l r } \text { Sales } & \$ 800,000 \\\text { Variable Costs } & 160,000 \\\text { Fixed Costs } & 40,000\end{array}$