Question

Artis Sales has two store locations. Store A has fixed costs of $125,000 per month and a variable cost ratio of 60%. Store B has fixed costs of $200,000 per month and a variable cost ratio of 30%. What is the break-even sales volume for Store A

Answer 1

Answer:

$312,500

Explanation:

break-even sales = Fixed Cost ÷ Contribution margin ratio

                             =  $125,000 ÷ 40 %

                             = $312,500

the break-even sales volume for Store A is  $312,500