Question

A company has fixed costs of $94,050. Its contribution margin ratio is 33% and the product sells for $69 per unit. What is the company's break-even point in dollar sales

Answer 1

,Answer:  $285,000

Explanation:

The Contribution margin of a product refers to its selling price less that of the variable costs incurred to make and sell the good.

It can be used to calculate the breakeven point in sales along with the fixed costs.

To calculate a company's break-even point in dollar sales, the formula is:

= Fixed costs / Contribution margin ratio

= 94,050 / 33%

= $285,000