Which of the following formulas is used to calculate the break-even point in terms of sales pounds
A)Fixed expenses/Unit contribution margin
B)Variable expenses/Contribution margin ratio
C)Fixed expenses/Contribution margin ratio
D)Net operating income/Unit contribution margin

Question

Quizplus · Accepted Answer

The formula used to calculate the break-even point in terms of sales pounds is Fixed Expenses / Contribution Margin Ratio. This formula helps to determine the number of sales pounds that need to be sold in order to cover the fixed expenses and break-even. A contribution margin is the difference between sales and variable expenses, while the contribution margin ratio is the contribution margin divided by sales. By using this formula, one can determine the amount of revenue required to cover the fixed costs of the business.

Which of the Following Formulas Is Used to Calculate the Break-Even