Last year, Beth's Baked Goods exactly broke even with cash fixed costs of $63,000. If its breakeven survival revenues level was $94,000, what was its variable cost revenue ratio (VCRR)?
A)0.27
B)0.30
C)0.33
D)0.67

Question

Quizplus · Accepted Answer

The variable cost revenue ratio (VCRR) is calculated as 1 - (Fixed Costs / Breakeven Revenue). Here, VCRR = 1 - ($63,000 / $94,000) = 1 - 0.67 = 0.33.

Last Year, Beth's Baked Goods Exactly Broke Even with Cash