Homework Answers
Answer: a. $2,125,000
Explanation
Contribution margin ratio = 100% - Variable cost ratio
= 100% - 60% = 40%
Break-even point in dollar sales = Fixed costs / Contribution margin ratio
= $850,000 / 40%
= $2,125,000
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(Round intermediate calculation to 2 decimal places,
e.g. 52.75.)
(1)
Break-even sales
units
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$
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safety in (1) dollars and (2) as a ratio. (Round ratio
to 0...
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