Campbell Inc.earned sales revenue of $150,000 in 2014.Campbell sells each unit of its product for $6.00 and has a 32 percent contribution margin.Campbell has fixed costs of $36,000. What is Cambell's breakeven point in sales dollars?

Question

Quizplus · Accepted Answer

We can use the formula: Breakeven point = Fixed costs / Contribution margin ratio

Contribution margin ratio = (Sales price - Variable cost) / Sales price
Contribution margin ratio = ($6.00 - $4.08) / $6.00 = 0.32

Breakeven point = $36,000 / 0.32 = $112,500

Therefore, the breakeven point in sales dollars for Campbell Inc. is $112,500. Option B is the correct answer.