Sacramento Sandals (SS) has fixed annual operating costs of $75,000.SS retails each pair of sandals for $14.99 each and the variable cost per pair is $4.99.Based on this information, the breakeven sales level in dollars is None of the above clone of prior item.
A)$25,495
B)$12,425
C)$8,995
D)none of the above

Question

Quizplus · Accepted Answer

To find the breakeven sales level in dollars, first calculate the breakeven point in units: Fixed Costs / (Selling Price per Unit - Variable Cost per Unit) = $75,000 / ($14.99 - $4.99) = 7,500 units. Then, multiply the breakeven units by the selling price: 7,500 units * $14.99 = $112,425. Since $112,425 is not listed, the answer is "none of the above."

Sacramento Sandals (SS) Has Fixed Annual Operating Costs of $75,000