Question

A company has fixed costs of $90,000. Its contribution margin ratio is 30% and the product sells for $75 per unit. What is the company's break-even point in dollar sales

Answer 1

the break-even point in dollar sales is $300,000

Step-by-step explanation:

The computation of the break-even point in dollar sales is shown below:

= Fixed cost ÷ contribution margin ratio

= $90,000 ÷ 0.30

= $300,000

by dividing the fixed cost from the contribution margin ratio we can get the break even point in dollars

hence, the break-even point in dollar sales is $300,000