Scenario 20.1
Use the following to answer the questions.
Concession Supply sells hotdogs,buns,and nacho ingredients to several major league ballparks across the country.Currently,Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total fixed costs = $1,200,Selling price = $16,and Variable costs = $6.
-Refer to Scenario 20.1.What is the breakeven point in dollar sales volume?
A)$1,200
B)$1,440
C)$3,000
D)$1,920
E)$1,600

Question

Quizplus · Accepted Answer

To calculate the breakeven point, we can use the following formula:
Breakeven point = Fixed costs ÷ (Selling price - Variable costs)
Breakeven point = $1,200 ÷ ($16 - $6)
Breakeven point = $1,200 ÷ $10
Breakeven point = $120 cases of hotdogs
To find the breakeven point in dollar sales volume, we can simply multiply the breakeven point by the selling price:
Breakeven point in dollar sales volume = $120 x $16
Breakeven point in dollar sales volume = $1,920
Therefore, the correct answer is option D. The breakeven point in dollar sales volume is $1,920.

Scenario 20.1 Use the Following to Answer the Questions