Benjamin Addai determined the following tax information: gross salary, $87,000; interest earned, $80; deductible IRA contributio
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Answer:
B. $544,000
Explanation:
Given: Sales: $480000.
Contribution margin ratio= 25%
net loss= $16000.
Break even point: It is point in business where profit is equal to expenses of the business.
Now, finding the fixed expense.
Fixed expense=
⇒ Fixed expense=
⇒ Fixed expense=
∴ Fixed expense=
Next, computing the break even point
Sales to Break even point=
⇒ Break even point=
∴ Break even point=
Hence, the break even point was $544000