Emerald Printing Company projected the following information for next year: $\begin{array} { l }
\text {Selling price per unit }&\$60.00\
\text {Contribution margin per unit }&\$45.00\
\text {Total fixed costs }&\$150,000\
\text {Tax rate }&30\%\
\end{array}$

What is the break-even point in dollars?

Question

Emerald Printing Company projected the following information for next year: $\begin{array} { l  }
 \text {Selling price per unit }&\$60.00\
 \text {Contribution margin per unit }&\$45.00\
 \text {Total fixed costs }&\$150,000\
 \text {Tax rate }&30\%\
\end{array}$

What is the break-even point in dollars?

Quizplus · Accepted Answer

The break-even point in dollars can be calculated using the formula: Break-even point in dollars = Total fixed costs / Contribution margin ratio. The contribution margin ratio is Contribution margin per unit / Selling price per unit = $45 / $60 = 0.75. Therefore, the break-even point in dollars = $150,000 / 0.75 = $200,000.

Emerald Printing Company Projected the Following Information for Next Year