Oak Hill Furniture has a contribution margin ratio of 20%, and a contribution margin per unit of $12.If fixed costs are $156,000, how much sales revenue must the company generate in order to reach its break-even point?

Question

Quizplus · Accepted Answer

To find the break-even point in terms of sales revenue, you can use the formula: Break-even point in dollars = Fixed Costs / Contribution Margin Ratio. Given that the fixed costs are $156,000 and the contribution margin ratio is 20% (or 0.20 when expressed as a decimal), the calculation is $156,000 / 0.20 = $780,000.

Oak Hill Furniture Has a Contribution Margin Ratio of 20