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Break-Even and Target Profits;volume Defined in Sales Dollars

Question 118

Essay

Break-even and target profits;volume defined in sales dollars.The manager of Hsu's Carryout Express estimates operating costs for the year will total $230,000 for fixed costs.
Required:
a.Find the break-even point in sales dollars with a contribution margin ratio of 40 percent.
b.Find the break-even point in sales dollars with a contribution margin ratio of 20 percent.
c.Find the sales dollars required with a contribution margin ratio of 50 percent to generate a profit of $150,000.
(Hsu's Carryout Express;break-even and target profits;volume defined in sales dollars. )

Correct Answer:

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a.Sales = $230,000/.40 = $575,...

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