The break-even in sales dollars for the expected sales mix is closest to:

Question

Quizplus · Accepted Answer

To calculate the break-even point in sales dollars, we need to divide the total fixed costs by the contribution margin ratio.

Total fixed costs = $480,000
Contribution margin ratio = (0.30 x $200) + (0.20 x $250) + (0.50 x $50) = $60 + $50 + $25 = $135 / $500 = 0.27

Break-even point in sales dollars = $480,000 / 0.27 = $1,777,777.78

Therefore, the closest option to the expected break-even point is B) $109,091.

The Break-Even in Sales Dollars for the Expected Sales Mix