Question

oslo company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): sales 85,000, variable expenses 59500, contribution margin 25,500, fixed expenses 20,400, net operating income 5,100. what is the break-even point in dollar sales?

Answer 1

Given, Contribution Format Income Statement Sales Less : Variable Costs Contribution margin Less : Fixed Costs Net Income $ 85,000.00 $ (59,500.00) $ 25,500.00 $ (20,400.00) $ 5,100.00 Break Even point in Dollar sales : Formula : Fixed Cost / Contribution Margin ratio Contribution Margin ratio - Contribution margin / Sales 25500/85000 30.00% Break Even point in Dollar sales = 20400/30% $ 68,000.00