Ploeger Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range. The break-even point in dollar sales is closest to:
A) $234,000
B) $237,900
C) $156,000
D) $0

Question

Ploeger Corporation has provided the following contribution format income statement.All questions concern situations that are within the relevant range.  The break-even point in dollar sales is closest to:
A) $234,000 
B) $237,900 
C) $156,000 
D) $0

Quizplus · Accepted Answer

CM ratio = Contribution margin ÷ Sales = $84,000 ÷ $240,000 = 35%
Dollar sales to break even = Fixed expenses ÷ CM ratio = $81,900 ÷ 35% = $234,000

Ploeger Corporation Has Provided the Following Contribution Format Income Statement