A firm has fixed operating costs of $150,000, total 18. sales of $1,500,000, and total variable...

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A firm has fixed operating costs of $150,000, total 18. sales of $1,500,000, and total variable costs of $1,275,000. With thi

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Answer 1

Answer #1

The formula to calculate the break even point = Fixed Costs/(Selling price-Variable costs).
Substituting the values, we get;

Break even point=150000/(1500000-1275000)
=150000/225000
=0.666666667
The amount will be: (Sales)*(Break even point)=1500000*0.666666667=1000000.001 or $1000000
Hence, option c is correct.
Answer: $1000000

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Answer 2

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