Figure 8-3
Sarah Smith, a sole proprietor, has the following projected figures for next year: $\begin{array}{lr}
\text { Selling price per unit } & £ 150.00 \
\text { Contributi on margin per unit } & £ 45.00 \
\text { Total fixed costs } & £ 630,000
\end{array}$
-Refer to Figure 8-3. What is the break-even point in monetary terms?

Question

Quizplus · Accepted Answer

The break-even point in monetary terms is calculated by dividing the total fixed costs by the contribution margin ratio. Contribution margin ratio = Contribution margin per unit / Selling price per unit = £45 / £150 = 0.3. Break-even point = £630,000 / 0.3 = £2,100,000.

Figure 8-3 Sarah Smith, a Sole Proprietor, Has the Following

Figure 8-3
Sarah Smith, a Sole Proprietor, Has the Following