Last year,Farrer Corporation had sales of $1,500,000,variable expenses of $900,000,and fixed expenses of $400,000.What would be the dollar sales at the break-even point?

Question

Quizplus · Accepted Answer

Variable expense ratio = Variable expenses F1F1F1S1F1F1F10 Sales
= $900,000 F1F1F1S1F1F1F10 $1,500,000 = 0.60
CM ratio = 1 - Variable expense ratio
= 1 - 0.60 = 0.40
Dollar sales to break even = Fixed expenses F1F1F1S1F1F1F10 CM ratio
= $400,000 F1F1F1S1F1F1F10 0.40
= $1,000,000

Last Year,Farrer Corporation Had Sales of $1,500,000,variable Expenses of $900,000,and