Question

Zirconia Fantasy sells only necklaces. 8 comma 000 units were sold resulting in $ 240 comma 000 of sales​ revenue, $ 60 comma 000 of variable​ costs, and $ 50 comma 000 of fixed costs. The breakeven point in total sales dollars is​ ________. A. $ 50 comma 000 B. $ 110 comma 000 C. $ 66 comma 667 D. $ 92 comma 308

Answer 1

Answer:

$66,667

Explanation:

Contribution margin = Sales Revenue - Variable cost = 240000-60000 = 180000

Percentage of contribution margin = Contribution margin / sales revenue = 180000 / 240000 = 75%

Breakevent point in total sales = Fixed costs / Percentage of contribution margin

= 50000/0.75 = $66,667