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Crane Corp. had total variable costs of $269,100, total fixed costs of $111,600, and total revenues of $390,000. Compute the required sales in dollars to break even.

Sagot :

Answer:

the break even point in dollars is $360,000

Explanation:

The computation of the break even sales in dollars is given below:

Break even sales in dollars is

= Fixed cost ÷ contribution margin ratio

where,

Contribution margin ratio is

= (Sales - variable cost) ÷ (Sales)

= ($390,000 - $269,100) ÷ ($390,000)

= 31%

Now the break even point in dollars is

= $111,600 ÷ 0.31

= $360,000

Hence, the break even point in dollars is $360,000

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