Explore BrainMass

# Information relates to the break-even point at Pezzo Corporation

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

The following information relates to the break-even point at Pezzo Corporation:
Sales dollars ...................... \$120,000
Total fixed expenses .......... \$30,000

If Pezzo wants to generate net operating income of \$12,000, what will its sales dollars have to be?
A) \$132,000
B) \$136,000
C) \$168,000
D) \$176,000

#### Solution Preview

Dear student,

Solution is provided in a separate excel file attached in the following parts.Answer (c) \$168000 is correct which is proved with working formulas and supporting explanatory notes on conceptual aspects of break even analysis.

Verification of Break even sales:
Break even sales \$120,000
Less: Variable cost \$90,000
Contribution margin \$30,000
Fixed cost \$30,000
Net Income (Zero ) Nil

Contribution margin ratio = 30000/120000 25%

Break even sales in Dollars ...

#### Solution Summary

The expert examines information related to the break-even point at Pezzo Corporation.

\$2.19