When fixed costs are $140 000 and variable costs are 30% of the selling price,then break-even sales will be:
A)$500 000.
B)$200 000.
C)$140 000.
D)indeterminable.

Question

Quizplus · Accepted Answer

The formula for break-even sales is:

Break-even sales = Fixed costs / (1 - (Variable costs as a percentage of selling price))

Substituting the given values, we get:

Break-even sales = $140,000 / (1 - 0.30) 
= $140,000 / 0.70 
= $200,000

Therefore, the break-even sales will be $200,000, which corresponds to choice B.

When Fixed Costs Are $140 000 and Variable Costs Are