Use the information below to answer the following question(s).
The Sweet Factory produces and sells specialty fudge. The selling price per pound is $20, variable costs are $12 per pound, and total fixed costs are $6,000.
-What are break-even sales in dollars at The Sweet Factory?

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 per pound is $20 - $12 = $8. The contribution margin ratio is $8 / $20 = 0.4. Therefore, the break-even sales in dollars is $6,000 / 0.4 = $15,000.

Use the Information Below to Answer the Following Question(s)