Wallace,Inc. ,prepared the following budgeted data based on a sales forecast of $6,000,000:
What would be the amount of sales dollars at the break-even point?

Question

Wallace,Inc. ,prepared the following budgeted data based on a sales forecast of $6,000,000: 
What would be the amount of sales dollars at the break-even point?

Quizplus · Accepted Answer

To find the break-even sales dollars, we need to calculate the contribution margin ratio (CMR) first. CMR = (Total Sales - Total Variable Costs) / Total Sales = ($6,000,000 - $4,410,000) / $6,000,000 = 0.265. 
Then, we can use the formula: 
Break-even Sales = Total Fixed Costs / CMR = $1,060,000 / 0.265 = $4,000,000. 
Therefore, the correct answer is C.