The following monthly data are available for the Phelps Company: The break-even sales for the month for the company are:

Question

The following monthly data are available for the Phelps Company:  The break-even sales for the month for the company are:

Quizplus · Accepted Answer

The formula to calculate break-even point is: 
Break-even Sales = Fixed Costs / (1 - (Variable Costs / Sales))

Using the data given in the question, we get:
Fixed Costs = $50,000
Variable Costs = $15,000 + $10,000 = $25,000 (sum of cost of goods sold and operating expenses)
Sales = $100,000

Substituting these values in the formula:
Break-even Sales = $50,000 / (1 - ($25,000 / $100,000)) = $137,500

Therefore, the break-even sales for the month for the company are $137,500.

The Following Monthly Data Are Available for the Phelps Company