Given the following information, the break-even point in sales dollars is:
Unit sales price $100
Variable production costs per unit $65
Fixed production costs $18 000
Selling and Administrative costs $3 000 + 5% of sales

Question

Quizplus · Accepted Answer

The break-even point in sales dollars is calculated by dividing the total fixed costs by the contribution margin ratio. The contribution margin per unit is $100 - $65 = $35. The contribution margin ratio is $35/$100 = 0.35. Total fixed costs are $18,000 + $3,000 = $21,000. The break-even point in sales dollars is $21,000 / 0.35 = $60,000.

Given the Following Information, the Break-Even Point in Sales Dollars