Break-Even Analysis for Kent Company
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Kent Company prepared the following table detailing its operating percentages for last year:
Sales.................................... 100%
Cost of sales:
Variable............................ 50%
Fixed................................. 10% 60%
Gross profit.......................... 40%
Other operating expenses:
Variable............................ 20%
Fixed................................. 15% 35%
Net operating income............ 5%
Kent's sales totaled $2,000,000 last year. At what sales level would the company break even?
$1,900,000
$1,666,667
$1,250,000
$833,333
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Solution Summary
This solution is comprised of a detailed calculation to find break-even point in sales level. Operating percentages for last year are determined.
Solution Preview
Answer: $1,666,667
Company will break even when the net operating income is 0.
Sales.................................... 100% 2,000,000
Cost of sales:
Variable............................ 50% x ...
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