Question

Zander Company has fixed costs of $12,000. The company's contribution margin ratio is 58% What is the breakeven point in sales dollars? (Round your answer to the nearest dollar)

Answer 1

The breakeven point is the level of sales at which the company's total revenue equals its total costs.

To calculate the breakeven point in sales dollars, we can use the following formula:

Breakeven point = Fixed costs / Contribution margin ratio

Plugging in the given values, we get:

Breakeven point = $12,000 / 0.58 = $20,689.66

Rounding this to the nearest dollar, the breakeven point in sales dollars is $20,690.