Paulson Company has provided the following information:

What is the amount of sales in dollars required for Paulson to break even?

Question

Paulson Company has provided the following information:

What is the amount of sales in dollars required for Paulson to break even?

Quizplus · Accepted Answer

B)Required sales in dollars = (Fixed costs + Target profit)/ Contribution margin ratio
Contribution margin ratio = Contribution margin / Net sales revenue
 11ea8a42_4f98_316b_8b44_a3c47488dc31_TB5024_00 Contribution margin ratio = ($35 / $50)× 100 = 70%
Required sales in dollars = (16,000 + 0)/ 70% = $22,857

Paulson Company Has Provided the Following Information