Calculate the ratio of variable costs to sales for a firm with a $3 million accounting break-even revenue point,$1.2 million fixed costs,and $450,000 depreciation.
A) 40%
B) 45%
C) 55%
D) 60%

Name: Calculate the ratio of variable costs to sales for a firm with a $3 million accounting break-even revenue point,$1.2 million fixed costs,and $450,000 depreciation. A) 40% B) 45% C) 55% D) 60%
Brand: Quizplus
Rating: 4.9 (31 reviews)

Question

Quizplus · Accepted Answer

Accounting B / E = $3m = ($1.2m + 0.45m) / x; x = 0.55Variable costs to sales = 1 − 0.55 = 0.45, or 45%

Calculate the Ratio of Variable Costs to Sales for a Firm