Sarah Smith,a sole proprietor,has the following projected figures for next year: $\begin{array}{lr}
\text { Selling price per unit } & \$ 150 .00\
\text { Contribution margin per unit } & \$ 45.00 \
\text { Total fixed costs } & \$630,000
\end{array}$
What is the break-even point in dollars?

Question

Sarah Smith,a sole proprietor,has the following projected figures for next year: $\begin{array}{lr}
\text { Selling price per unit } & \$ 150 .00\
\text { Contribution margin per unit  } & \$ 45.00 \
\text { Total fixed costs } & \$630,000
\end{array}$ 
 What is the break-even point in dollars?

Quizplus · Accepted Answer

The break-even point in units is calculated by dividing total fixed costs by the contribution margin per unit: $ \frac{630,000}{45} = 14,000 $ units. To find the break-even point in dollars, multiply the break-even point in units by the selling price per unit: $ 14,000 \times 150 = 2,100,000 $.

Sarah Smith,a Sole Proprietor,has the Following Projected Figures for Next