Question

The sales and cost data for two companies in the transportation industry are as follows: X Company Y Company Amount Percent Amount Percent Sales $120,000 100 $120,000 100 Variable costs 72,000 60 36,000 30 Contribution margin 48,000 40 84,000 70 Fixed costs 36,000 72,000 Operating income $12,000 $12,000 The annual breakeven point in sales dollars for X Company is:

Answer 1

Answer:

The annual breakeven point in sales dollars for Company X is $90,000

Explanation:

Hi, in order to find the break even point (BEP) in dollars, we need to use the following formula.

$BEP(Dollars)=\frac{FixedCosts}{ContributionMargin}$

Everything should look like this.

$BEP(Dollars)=\frac{36,000}{0.4} =90,000$

Best of luck.