Corny and Sweet grows and sells sweet corn at its roadside produce stand. The selling price per dozen is $4.00, variable costs are $2.00 per dozen, and total fixed costs are $1200.00. What are breakeven sales in dollars?

Question

Quizplus · Accepted Answer

The breakeven point in sales dollars is calculated by dividing the total fixed costs by the contribution margin ratio. The contribution margin per dozen is $4.00 - $2.00 = $2.00. The contribution margin ratio is $2.00 / $4.00 = 0.5. Therefore, breakeven sales in dollars = $1200 / 0.5 = $2400.

Corny and Sweet Grows and Sells Sweet Corn at Its