Question

Sabv Corporation's break-even-point in sales is $910,000, and its variable expenses are 80% of sales. If the company lost $41,000 last year, sales must have amounted to:

Answer 1

Answer:

Sales= $705,000

Explanation:

Giving the following information:

Break-even-point in sales= $910,000

Variable expenses= 80% of sales.

Loss= $41,000

First, we need to calculate the fixed costs:

Fixed costs= 910,000*0.2= $182,000

Now, we need to determine the contribution margin:

Actual CM= 182,000 - 41,000= $141,000

Finally, the sales revenue:

Sales= 141,000/0.2= $705,000