Adam Company sells one product at a price of $50 per unit. Variable expenses are 40 percent of sales, and fixed expenses are $50,000. The sales dollars level required to break even are:

Name: Adam Company sells one product at a price of $50 per unit. Variable expenses are 40 percent of sales, and fixed expenses are $50,000. The sales dollars level required to break even are:
Brand: Quizplus
Rating: 4.9 (47 reviews)

Question

Quizplus · Accepted Answer

Break even in sales dollars = Fixed costs divided by contribution margin percentage
= $50,000 / (100% - 40%) = $83,333.34

Adam Company Sells One Product at a Price of $50