Sabv Corporation's break-even-point in sales is $820,000, and its variable expenses are 80% of sales. If the company lost $32,000 last year, sales must have amounted to:
SALES =$820000
VARIABLE COST = $820000*80%=$656000
CONTRIBUTION = $820000-$656000=$164000
FIXED COST +PROFIT= CONTRIBUTION
FIXED COST -LOSS = CONTRIBUTION
AT BREAK EVEN POINT PROFIT WILL BE ZERO
FIXED COST +0 =$164000
FIXED COST = $164000
COMPANY HAS LOSS OF $32000 IT MEANS CONTRIBUTION
FIXED COST-LOSS = CONTRIBUTION
$164000-$32000=$132000
CONTRIBUTION IS 20% OF SALES SO WE CAN CALCULATE SALES AS FOLLOW
SALES= (CONTRIBUTION *100)/(100-VARIABLE COST)
($132000*100)/(100-80)=$660000
Sabv Corporation's break-even-point in sales is $820,000, and its variable expenses are 80% of sales. If...
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