If the sale price per unit is $30.00, the variable expense per unit is $21, and total fixed expenses are $300,000, what are the break-even sales in dollars?

Question

Quizplus · Accepted Answer

The break-even point in sales dollars is calculated by dividing the total fixed expenses by the contribution margin ratio. The contribution margin per unit is $30 - $21 = $9. The contribution margin ratio is $9 / $30 = 0.3. Therefore, the break-even sales in dollars is $300,000 / 0.3 = $1,000,000.

If the Sale Price Per Unit Is $30