Which of the following formulas is used to calculate the breakeven point in sales dollars?

Question

Quizplus · Accepted Answer

The formula used to calculate the breakeven point in sales dollars is total fixed costs divided by contribution margin ratio. This is because the breakeven point represents the point at which total revenue equals total costs, and the contribution margin ratio represents the percentage of each sales dollar that contributes to covering fixed costs and profit. Therefore, dividing total fixed costs by the contribution margin ratio gives the amount of sales dollars needed to cover fixed costs and reach the breakeven point.

Which of the Following Formulas Is Used to Calculate the Breakeven