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Emerald Printing Company projected the following information for next year:
Selling price per unit $60.00
Contribution margin per unit $45.00
Total fixed costs $150,000
Tax rate 30%
What is the break-even point in dollars?

Respuesta :

Answer:

$200,000

Explanation:

Selling price per unit = $60.00

Contribution margin per unit = $45.00

Total fixed costs = $150,000

Tax rate = 30%

Contribution margin ratio = Contribution margin ÷ Selling price

                                           = $45 ÷ $60

                                            = 0.75

Hence,

Break-even point =Total Fixed costs ÷ Contribution margin ratio

                              = 150,000 ÷ 0.75

                              = $200,000

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