Question

Ploeger Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range.Sales (4,000 units) $ 240,000Variable expenses $156,000Contribution margin $84,000Fixed expenses $81,900Net operating income $2,100What is the break-even point for Ploeger Corporation in dollar sales?

Answer 1

Answer:

Break-even point (dollars)= $234,000

Explanation:

Giving the following information:

Sales (4,000 units) $240,000

Variable expenses $156,000

Fixed expenses $81,900

To calculate the break-even point in dollars, we need to use the following formula:

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

Break-even point (dollars)= 81,900/ [(240,000 - 156,000)/240,000]

Break-even point (dollars)= 81,900/0.35

Break-even point (dollars)= $234,000