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3 years ago

If fixed costs are $821,000 and variable costs are 63% of sales, what is the break-even point in sales dollars

Business

1 answer:

Nezavi [6.7K]3 years ago

5 0

Answer:

Break-even point (dollars)= $2,218,919

Explanation:

Giving the following information:

Fixed costs= $821,000

Variable costs rate= 63%

If the variable cost rate is 63%, then the contribution margin rate is:

Contribution margin ratio= 1 - 0.63

Contribution margin ratio= 0.37

Now, the break-even point in sales revenue:

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

Break-even point (dollars)= 821,000 / 0.37

Break-even point (dollars)= $2,218,919

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