15. Last year Dunson Corporation reported sales of $820,000, a contribution margin ratio of 40% and a net loss of $14,000. Based on this information, the break-even point was: A. $855,000
B. $880,000
C. $744,000
D. $800,000
Answer
--Break even sales = Fixed Cost (see working) / Contribution
margin ratio
= $ 342000 / 40%
= $ 855,000
--Correct Answer = Option 'A' $ 855,000
--Working
A | Sales | $820,000 |
B = A x 40% | Contribution margin | $328,000 |
C | Net Income (Loss) | ($14,000) |
D = B - C | Fixed Cost | $342,000 |
15. Last year Dunson Corporation reported sales of $820,000, a contribution margin ratio of 40% and...
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