Cameron Corp. Cameron Corp. has the following product information:
Refer to the Cameron Corp. information above. What is the break-even point in sales dollars?

Question

Cameron Corp. Cameron Corp. has the following product information:
 Refer to the Cameron Corp. information above. What is the break-even point in sales dollars?

Quizplus · Accepted Answer

The break-even point in sales dollars can be calculated using the following formula: 
Break-even point (in sales dollars) = Fixed costs ÷ Contribution margin ratio 
Fixed costs for Cameron Corp. = $110,000 
Contribution margin ratio = (Sales price per unit – Variable cost per unit) ÷ Sales price per unit 
Sales price per unit = $50 
Variable cost per unit = $15 
Contribution margin ratio = ($50 - $15) ÷ $50 = 0.7 
Break-even point = $110,000 ÷ 0.7 = $157,143 
Therefore, the closest option is C) $170,000.