Junsin Corporation's budget for next year appears below. The budget assumes the company will sell 30,000 units.
$\begin{array}{|l|r|r|}
\hline \text { Sales } & & \$ 600,000 \
\hline \text { Less: expenses } & & \
\hline \text { Variable } & \$ 390,000 & \
\hline \text { Fixed } & \$ 140,000& \$ 530,000 \
\hline \text { Operating income } & & \$ 70,000 \
\hline
\end{array}$

-What is the break-even point in annual sales dollars?

Question

Junsin Corporation's budget for next year appears below. The budget assumes the company will sell 30,000 units.
$\begin{array}{|l|r|r|}
\hline \text { Sales } & & \$ 600,000 \
\hline \text { Less: expenses } & & \
\hline \text { Variable } & \$ 390,000 & \
\hline \text { Fixed } &  \$ 140,000& \$ 530,000 \
\hline \text { Operating income } & & \$ 70,000 \
\hline
\end{array}$

-What is the break-even point in annual sales dollars?

Quizplus · Accepted Answer

The break-even point in sales dollars is calculated by dividing the total fixed costs by the contribution margin ratio. The contribution margin ratio is (Sales - Variable Expenses) / Sales = ($600,000 - $390,000) / $600,000 = 35%. The break-even point is $140,000 / 0.35 = $400,000.

Junsin Corporation's Budget for Next Year Appears Below -What Is the Break-Even Point in Annual Sales Dollars? A)

Junsin Corporation's Budget for Next Year Appears Below -What Is the Break-Even Point in Annual Sales Dollars?
A)