Question

Last month Peggy Company had a $30,310 profit on sales of $350,000. Fixed costs are $92,190 a month. What sales revenue is needed for Peggy to break even? (Round your answer to the nearest dollar amount.)
A. $122,500
B. $380,310
C. $30,310
D. $263,400

Answer 1

Answer:

D. $263,400

Explanation:

Calculation for the What sales revenue is needed for Peggy to break even

First step is to calculate the contribution ratio

Contribution ratio=(30,310 + 92,190)/350,000

Contribution ratio= 35%

Second Step will be to calculate the Sales Revenue

Sales Revenue=92,190/35%

Sales Revenue= $263,400

Therefore What sales revenue is needed for Peggy to break even is $263,400