Tanaka Company has fixed costs of $14,000.Their contribution margin ratio is 40% and ratio of selling expenses to sales is 20%.What is the breakeven point in sales dollars?
A) $70,000
B) $35,000
C) $5,600
D) $2,800

Question

Quizplus · Accepted Answer

B) Required sales in dollars = (Fixed costs + Target profit) / Contribution margin ratio
Required sales in dollars = ($14,000 + 0) / 40% = $35,000

Tanaka Company Has Fixed Costs of $14,000