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Fixed costs are $1500000 and the variable costs are 75% of the unit selling price. What is the break-even point in dollars?

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abiolataiwo2015

Answer:

$6,000,000

Explanation:

Calculation to determine the break-even point in dollars

Using this formula

Break-even point (Dollars)=Fixed costs/(1-Variable costs percentage of unit selling price)

Let plug in the formula

Break-even point (Dollars)=$1,500,000/ (1-.75)

Break-even point (Dollars)=$1,500,000/.25

Break-even point (Dollars)=$6,000,000

Therefore the break-even point in dollars is $6,000,000

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