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If fixed costs are $750,000 and variable costs are 60% of sales, what is the break-even point in sales dollars?

Respuesta :

Tundexi

Answer:

$1,875,000

Explanation:

Break even point in sales = Fixed cost / Contribution margin ratio

When Contribution margin ratio = 100% - Variable cost ratio

Contribution margin ratio = 100% - 60%

Contribution margin ratio = 40%

Break even point in sales = $750,000 / 40%

= $1,875,000

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