Question

Company A has sales of $500,000, variable costs of $350,000, and fixed costs of $150,000. Company A has ______.

Answer 1

Company A has: Reached the break-even point  and Company A's contribution margin equals the fixed costs.

What is break even point?

Break even point is the point in which a company neither make gain or loss.

Based on the information given company A  has reached the break-even point because there is no gain or loss.

Company A's contribution margin also equals the fixed costs.

Contribution margin=Sales-Variables cost

Contribution margin=$500,000-$350,000

Contribution margin=$150,000

Contribution margin equal fixed cost of the amount of $150,000.

Inconclusion Company A has: Reached the break-even point  and Company A's contribution margin equals the fixed costs.

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