Jatry Corporation’s budgeted sales are $300,000, its budgeted variable expenses are $210,000, and its budgeted fixed expenses are $60,000. The company’s break-even in dollar sales is:
Selected: a. $200,000 This answer is correct.
b. $330,000
c. $210,000
d. $270,000
Correct! Contribution margin equals $300,000 less $210,000 equals $90,000. Contribution margin ratio equals $90,000 divided by $300,000 equals 30 percent. Break-even in total sales dollars equals Fixed expenses divided by Contribution margin ratio equals $60,000 divided by 30 percent equals $200,000.