Sales total $400,000 when variable costs total $300,000 and fixed costs total $50,000.The breakeven point in sales dollars is ________.
A) $200,000
B) $120,000
C) $170,000
D) $210,000

Question

Quizplus · Accepted Answer

The breakeven point in sales dollars is calculated as Fixed Costs / (1 - Variable Cost Ratio). The Variable Cost Ratio is $300,000 / $400,000 = 0.75. So, the breakeven point is $50,000 / (1 - 0.75) = $200,000.

Sales Total $400,000 When Variable Costs Total $300,000 and Fixed