A company that makes optical computer input devices has calculated their revenue and costs as follows for the most recent fiscal period: Sales $522 000
Costs:
Fixed Costs $145 000
Variable Costs 208 800
Total Costs 353 800
Net Income $168 200
What is the break-even point in sales dollars?
A) $362 500.00
B) $589 666.67
C) $241 666.67
D) $870 000.00
E) $280 333.33

Question

Quizplus · Accepted Answer

The break-even point is the level of sales at which total revenue equals total costs. 
To calculate the break-even point in sales dollars, we need to find the level of sales that will cover both the fixed costs and the variable costs. 
Let x be the break-even point in sales dollars. 
Then, we can set up the following equation:

522,000x = 145,000 + 208,800x

Solving for x:

313,200x = 145,000

x = 145,000/313,200

x ≈ $241,666.67

Therefore, the break-even point in sales dollars is $241,666.67.

A Company That Makes Optical Computer Input Devices Has Calculated