Given a fixed cost of $30,000 and a contribution margin ratio of 40%, what is the breakeven sales revenue?

Multiple choice question for Cost Volume Profit Analysis. Select an option, then review the explanation below.

Explanation

To find the breakeven revenue, divide the fixed costs by the contribution margin percentage: $30,000 ÷ 0.40 = $75,000. Therefore, the breakeven sales revenue is $75,000.

Practice related questions from the same subject.

1.What is obtained when the fixed costs are divided by the contribution margin per unit?
2.Given a contribution margin ratio of 30% and a selling price of $5,000, what is the contribution margin amount for each unit?
3.Given a contribution margin of $13,000 and total variable costs amounting to $7,000, what is the total revenue?
4.Given a selling price of $5000 and a contribution margin per unit of $1000, what is the contribution margin percentage?
5.Given a revenue of $15,000, variable costs totaling $5,000, and fixed costs amounting to $2,000, what is the operating income?

Given a fixed cost of $30,000 and a contribution margin ratio of 40%, what is the breakeven sales revenue?

Explanation

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