Old Canadian Company has sales of $500,000, variable costs of $425,000, and fixed costs of $25,000.New World Company has sales of $500,000, variable costs of $200,000, and fixed costs of $250,000.Old Canadian break-even point in dollars is

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Break-even point = Fixed costs / (Contribution margin ratio)Contribution margin ratio = (Sales - Variable costs) / SalesFor Old Canadian Company,Contribution margin ratio = ($500,000 - $425,000) / $500,000 = 0.15Break-even point = $25,000 / 0.15 = $166,667

Old Canadian Company Has Sales of $500,000, Variable Costs of $425,000