Question

Emerald Printing Company projected the following information for next year:

Selling price per unit $60.00
Contribution margin per unit $45.00
Total fixed costs $150,000
Tax rate 30%
What is the break-even point in dollars?

Answer 1

$200,000

Step-by-step explanation:

Selling price per unit = $60.00

Contribution margin per unit = $45.00

Total fixed costs = $150,000

Tax rate = 30%

Contribution margin ratio = Contribution margin ÷ Selling price

= $45 ÷ $60

= 0.75

Hence,

Break-even point =Total Fixed costs ÷ Contribution margin ratio

= 150,000 ÷ 0.75

= $200,000