If fixed costs are $750,000 and variable costs are 55% of sales,what is the break-even point (in dollars)?

Question

Quizplus · Accepted Answer

The break-even point can be calculated by using the formula:

Break-even point = Fixed costs / (1 - Variable costs as a percentage of sales)

In this case, fixed costs are $750,000 and variable costs are 55% of sales, so we can calculate the break-even point as:

Break-even point = $750,000 / (1 - 0.55) = $750,000 / 0.45 = $1,666,667

Therefore, the best choice is C, with a break-even point of $1,666,667.

If Fixed Costs Are $750,000 and Variable Costs Are 55