Sales total $250 000 when variable costs total $187 500 and fixed costs total $40 000.The break-even point in sales dollars is:

Question

Quizplus · Accepted Answer

The break-even point in sales dollars is calculated by dividing the fixed costs by the contribution margin ratio. The contribution margin ratio is calculated as (Sales - Variable Costs) / Sales. In this case, it's ($250,000 - $187,500) / $250,000 = 0.25. Therefore, the break-even point is $40,000 / 0.25 = $160,000.

Sales Total $250 000 When Variable Costs Total $187 500