Sales total $200,000 when variable costs total $150,000 and fixed costs total $30,000.The break-even point in sales dollars is
A)$200,000.
B)$120,000.
C)$40,000.
D)$30,000.
E)$180,000.

Question

Quizplus · Accepted Answer

To calculate the break-even point in sales dollars, we need to use the formula:

Break-even point = (Fixed costs) / (1 - (Variable costs / Sales))

Plugging in the given values, we get:

Break-even point = (30,000) / (1 - (150,000 / 200,000))
Break-even point = (30,000) / (1 - 0.75)
Break-even point = (30,000) / 0.25
Break-even point = 120,000

Therefore, the break-even point in sales dollars is $120,000.

Sales Total $200,000 When Variable Costs Total $150,000 and Fixed