Variable expenses of Snoopy Limited constitute 60% of sales value and its fixed expenses are $75 000. What is the break-even point in terms of sales dollars?

Name: Variable expenses of Snoopy Limited constitute 60% of sales value and its fixed expenses are $75 000. What is the break-even point in terms of sales dollars?
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Quizplus · Accepted Answer

The break-even point in sales dollars is calculated as Fixed Expenses / (1 - Variable Expense Ratio). Here, it's $75,000 / (1 - 0.60) = $75,000 / 0.40 = $187,500.

Variable Expenses of Snoopy Limited Constitute 60% of Sales Value