Question

va Company sells one product at a price of $30 per unit. Variable expenses are 30 percent of sales, and fixed expenses are $35,000. Tax rate is 30%. The sales dollars level required to break even for Eva are: Group of answer choices $2,143 $60,000 $41,667 $64,290

Answer 1

Answer:

Contribution margin per unit = Selling price * ( 1 - Variable cost ratio ) = 30 * ( 1 - 30% )=21  

Break-even point in units = Fixed expenses / Contribution margin per unit = 35000 / 21=1667 units

Sales dollars level required to break-even = Break-even point in units * Selling price per unit = 1667 * 30

=$50010