Use the Following Information to Determine the Break-Even Point in Sales

question 141

Multiple Choice

Use the following information to determine the break-even point in sales dollars:

• A)$88,500.
• B)$108,500.
• C)$173,600.
• D)$326,400.
• E)$500,000.

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Definitions:

Minimum Legal Capital

The least amount of capital that a company is required to maintain by law, to protect creditors from the company's liabilities.

Convertible Stock

Equity securities that can be converted into a predetermined number of common shares, at the option of the holder.

Callable Stock

A type of security that gives the issuer the right to buy back the shares at a predetermined price after a certain period.

Noncumulative Stock

Preferred stock where dividend payments are not accumulated if they are not declared, meaning shareholders may lose the right to dividends in missed payment periods.