What is the break-even level of revenues for a firm with $6 million in sales,variable costs of $3.9 million,fixed costs of $1.2 million,and depreciation of $1 million?
A) $3,428,571
B) $6,100,000
C) $6,285,714
D) $6,557,377

Question

Quizplus · Accepted Answer

Break-even level of revenues can be calculated as:

Break-even level of revenues = (Fixed costs + Depreciation) / (1 - (Variable costs ÷ Sales))

= (1.2 million + 1 million) / (1 - (3.9 million ÷ 6 million))

= $6,285,714

Therefore, the break-even level of revenues for the given firm is $6,285,714, which is option C.

What Is the Break-Even Level of Revenues for a Firm