Better Bonds
Better Bonds provided the following data: $\begin{array}{lr}
\text { Sales } & \$ 540,000 \
\text { Variable costs } & \$ 378,000 \
\text { Fixed costs } & \$ 120,000 \
\text { Expected production and sales in units } & 40,000
\end{array}$
-Refer to Better Bonds. What is the break-even point in sales dollars?
A) $112,500
B) $150,000
C) $171,429
D) $400,000

Question

Quizplus · Accepted Answer

The break-even point in sales dollars is calculated by dividing the total fixed costs by the contribution margin ratio. The contribution margin ratio is calculated as (Sales - Variable Costs) / Sales = ($540,000 - $378,000) / $540,000 = 0.3. The break-even point in sales dollars is $120,000 / 0.3 = $400,000.

Better Bonds Better Bonds Provided the Following Data -Refer to Better Bonds

Better Bonds
Better Bonds Provided the Following Data -Refer to Better Bonds