Liu Sales has two store locations. Sanford has fixed costs of $250,000 per month and a contribution margin ratio of 35%. Orlando has fixed costs of $400,000 per month and a contribution margin ratio of 65%. At what sales volume would the two stores have equal profits or losses?
A) $500,000.
B) $650,000.
C) $1,300,000.
D) Cannot determine with the information given.

Question

Quizplus · Accepted Answer

The Answer of Liu Sales has two store locations. Sanford has fixed costs of $250,000 per month and a contribution margin ratio of 35%. Orlando has fixed costs of $400,000 per month and a contribution margin ratio of 65%. At what sales volume would the two stores have equal profits or losses?
A) $500,000.
B) $650,000.
C) $1,300,000.
D) Cannot determine with the information given.

Liu Sales Has Two Store Locations