Please explain step by step why its D
Homework Answers
Answer- d. $ 200,000.
Explanation-
Break-even point in dollars = Fixed cost / Contribution margin ratio.
= $150,000/ 75%
= $ 200,000.
Note: Contribution Margin Ratio =( Sales - Variable Costs ) / Sales
= ($ 400,000 - 100,000 ) / $ 400,000
= $ 300,000 / 400,000
= 0.75 or 75%
0.75 * 100 = 75 %
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Please explain step by step why its D
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