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Oxicon Inc. manufactures several different types of candy for various retail stores. The accounting manager has...

Oxicon Inc. manufactures several different types of candy for various retail stores. The accounting manager has requested that you determine the sales dollars required to break even for next quarter based on past financial data. Your research tells you that the total variable costs will be $800,000, total sales will be $1,000,000, and fixed costs will be $130,000. What is the breakeven point in sales dollars? (Do not round intermediate calculations.)

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Answer #1

Contribution margin ratio

= (1,000,000-8,000,000)/1,000,000

= 20%

Breakeven sales = Fixed cost/CM ratio

= 130,000/20%

= 650,000

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