Question

Blossom Corp. had total variable costs of $137,500, total fixed costs of $103,500, and total revenues of $250,000. Compute the required sales in dollars to break even. Required sales $enter the required sales in dollars

Answer 1

Answer:

$230,000

Explanation:

The computation of break-even sales is shown below:-

Contribution margin = Sales - Variable costs

=($250,000 - $137,500)

= $112,500

Contribution margin ratio = Contribution margin ÷ Sales

= ($112,500 ÷ $250,000)

= 0.45

So,

Break-even sales = Fixed expenses ÷ Contribution margin ratio

=($103,500 ÷ 0.45)

= $230,000