Baker Company sells its product for $60.In addition,it has a variable cost ratio of 40 percent and total fixed costs of $9,000.What is the break-even point in sales dollars for Baker Company?

Question

Quizplus · Accepted Answer

The break-even point in sales dollars can be calculated using the formula: Break-even point = Fixed Costs / (1 - Variable Cost Ratio). Given that the fixed costs are $9,000 and the variable cost ratio is 40% (or 0.4), the calculation is $9,000 / (1 - 0.4) = $9,000 / 0.6 = $15,000.

Baker Company Sells Its Product for $60