Sales total $300,000 when variable costs total $180,000 and fixed costs are $60,000. Breakeven sales total:...

Question

Question

Sales total $300,000 when variable costs total $180,000 and fixed costs are $60,000. Breakeven sales total:

A. $300,000

B. $150,000

C. $ 60,000

D. $ 90,000

E. Cannot be determined with information provided.

Answer 1

Answer #1

Contribution margin=Sales-Variable cost

=(300,000-180,000)=$120,000

Contribution margin ratio=Contribution margin/Sale

=120,000/300,000=0.4

Hence breakeven sales=Fixed cost/Contribution margin ratio

=60,000/0.4

=$150,000

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Answer 2

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