Question

Panera Bread sells a box of bagels for $6 with a contribution margin of 62.5%. Its fixed costs are $150,000 per year. How much sales in dollars does Panera Bread need to break-even per year if bagels are its only product?

Answer 1

Answer:

Break-even Sales in Dollar = $240,000

Explanation:

The Breakeven is the level of activity that a business must operate to in order to cover its total costs. It denotes the minimum number of customers or quantity of product that a business must serve or produce inorder for its profit to be equal to zero.

At the break-even point, the business makes no profit or loss because the total revenue equals the total costs.

It is calculated as follows:

Break-even Points (in sales revenue) = Total Fixed cost

                                                                  contribution margin

Panera Bread must sell box of bagels worth:

Break-even = 150,000/ 62.5%

                    = $240,000