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lapo4ka [179]
3 years ago
13

Use the information below to answer questions 4-7. Drake Company's income statement for the most recent year appears below:

Business
1 answer:
Colt1911 [192]3 years ago
6 0

Answer:

(A) $731,250

Explanation:

The formula to compute the break-even point in sales dollars is shown below:

= (Fixed expenses or Fixed cost) ÷ (Contribution ratio)

where,

Contribution ratio = Contribution margin ÷ sales

                             = $208,000 ÷ $650,000

                             = 0.32 or 32%

And, the fixed expense is $234,000

Now put the values to the above formula

So, the value would equal to

= $234,000 ÷ 32%

= $731,250

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