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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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3 years ago

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3 years ago

Read 2 more answers

During the year, Trombley Incorporated has the following inventory transactions.

Furkat [3]

Answer:

a. Ending inventory = $162, Cost of Sales = $593, Gross Profit = $478

b. Ending inventory = $227, Cost of Sales = $528, Gross Profit = $543

c. Ending inventory = $492.30, Cost of Sales = $557.94 , Gross Profit = $513.06

d. FIFO

Explanation:

FIFO

Ending inventory = 18 units × $9 = $162

Total = $162

Cost of Sales = 11 units × $13 = $143

16 units × $12= $192

21 units × $11 = $231

3 units × $9 = $27

Total = $593

Gross Profit = Sales less Cost of Sales

= (51 units × $21) - $593

= $1,071 - $593

= $478

LIFO

Ending inventory = 11 units × $13 = $143

7 units × $12 = $84

Total = $227

Cost of Sales = 9 units × $12 = $108

21 units × $11 = $231

21 units × $9 = $189

Total = $528

Gross Profit = Sales less Cost of Sales

= (51 units × $21) - $528

= $1,071 - $528

= $543

Weighted-average cost

First determine the average cost.

Average cost = Total Cost / Total units

= $ 755 / 69

= $10.94

Ending inventory = Units Remaining × Average Price

= 45 units × $10.94

= $492.30

Cost of Sales = Units Sold × Average Cost

= 51 units × $10.94

= $557.94

Gross Profit = Sales less Cost of Sales

= (51 units × $21) - $557.94

= $1,071.00 - $557.94

= $513.06

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3 years ago