Compute the break-even point (in dollars) if fixed costs are $540,000 and variable cost are 70% of sales.
A) $3,850,000
B) $1,800,000
C) $1,650,000
D) $900,000

Question

Quizplus · Accepted Answer

The break-even point in dollars is calculated using the formula: Break-even point = Fixed Costs / (1 - Variable Cost Percentage). Here, it's $540,000 / (1 - 0.70) = $540,000 / 0.30 = $1,800,000.

Compute the Break-Even Point (In Dollars) If Fixed Costs Are