Question

Use the following information to determine the break-even point in sales dollars:

Answer 1

Answer:

$329,600

Explanation:

The computation of break-even point is shown below:-

But before that first we need to compute the following calculations

Total contribution margin ratio = Sales - Variable cost

= $516,000 - $193,500

= $322,500

Contribution margin in percentage = Total Contribution Margin ÷ Total Sales

= $322,500 ÷ $516,000

= 62.50%

Now,

Break-even point = Total fixed cost ÷ Contribution margin in percentage

= $206,000 ÷ 62.50%

= $329,600