Dolce Company is planning to sell 400,000 hammers for $1.50 per unit. The contribution margin ratio is 20%. If Dolce will break even at this level of sales, what are the fixed costs?

Name: Dolce Company is planning to sell 400,000 hammers for $1.50 per unit. The contribution margin ratio is 20%. If Dolce will break even at this level of sales, what are the fixed costs?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Fixed costs = (1 - Contribution margin ratio) * Sales revenue= (1 - 0.20) * 400,000 * $1.50= $120,000

Dolce Company Is Planning to Sell 400,000 Hammers for $1