The income statement for ABC Developers is: $$\begin{array} { l r }
\text { Sales } & \$ 150000 \
\text { Variable Expense } & \underline { 90000 } \
\text { Contribution Margin } & \$ 60,000 \
\text { Fixed Expenses } & \underline { 40,000 } \
\text { Profit } & \$ 20,000
\end{array}$$ What is the break-even point in sales dollars?

Question

The income statement for ABC Developers is: $$\begin{array} { l r } 
\text { Sales } & \$ 150000 \
\text { Variable Expense } & \underline { 90000 } \
\text { Contribution Margin } & \$ 60,000 \
\text { Fixed Expenses } & \underline { 40,000 } \
\text { Profit } & \$ 20,000
\end{array}$$ What is the break-even point in sales dollars?

Quizplus · Accepted Answer

The break-even point in sales dollars is calculated by dividing the fixed expenses by the contribution margin ratio. Contribution Margin Ratio = Contribution Margin / Sales = $60,000 / $150,000 = 0.4. Break-even sales = Fixed Expenses / Contribution Margin Ratio = $40,000 / 0.4 = $100,000.

The Income Statement for ABC Developers Is What Is the Break-Even Point in Sales Dollars? A)$33 333

The Income Statement for ABC Developers Is What Is the Break-Even Point in Sales Dollars?
A)$33 333