Explore BrainMass

# Finding the Break-even Point in Sales Dollars

Not what you're looking for? Search our solutions OR ask your own Custom question.

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

Wallace, Inc., prepared the following budgeted data based on a sales forecast of \$6,000,000:

Variable Fixed
Direct materials \$1,600,000
Direct labor 1,400,000
Selling expenses 240,000 360,000
Total \$3,900,000 \$1,400,000

What would be the amount of sales dollars at the break-even point?
A) \$2,250,000
B) \$3,500,000
C) \$4,000,000
D) \$5,300,000

#### Solution Preview

The formula to find the break-even point in sales dollars is:

Break-even point in sales dollars=Fixed Costs/Contribution Margin Ratio
Contribution Margin Ratio=Contribution Margin/Sales Revenues
Contribution Margin Ratio=(Sales Revenues-Variable Costs)/Sales ...

#### Solution Summary

This solution discusses cost-volume-profit relationships in great depth and illustrates how to find the break-even point in sales dollars.

\$2.49