The dollar breakeven sales level can be solved for by dividing fixed costs by the contribution margin ratio.

Question

Quizplus · Accepted Answer

This statement is true. The dollar breakeven sales level is the point where the company's total sales revenue equals its total costs (fixed and variable). The contribution margin ratio represents the amount of each sales dollar that contributes to covering the company's fixed costs and generating profits. By dividing fixed costs by the contribution margin ratio, the dollar breakeven sales level can be determined.

The Dollar Breakeven Sales Level Can Be Solved for by Dividing