Question

Use the following information to determine the break-even point in sales dollars: Unit sales 50,000 Units Dollar sales $ 500,000 Fixed costs $ 204,000 Variable costs $ 187,500 Group of answer choices $88,500. $326,400. $108,500. $500,000. $173,600.

Answer 1

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Unit sales 50,000

Units Dollar sales $ 500,000

Fixed costs $ 204,000

Variable costs $ 187,500

First, we need to calculate the unitary selling price and variable cost:

Unitary Selling price= 500,000/50,000= $10

Unitary variable cost= 187,500/50,000= $3.75

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 204,000/ [(10 - 3.75)/10]= $326,400