Calculate the Break-Even Level of Sales, Assuming: $1

question 45

Multiple Choice

Calculate the break-even level of sales, assuming: $1.4 million fixed costs, $400,000 depreciation expense, and variable costs-to-sales ratio of 65 percent.

• A)$2,769,231
• B)$2,857,143
• C)$4,000,000
• D)$5,142,857 Break-even sales =

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Definitions:

Adam Smith

An 18th-century Scottish economist and philosopher, widely considered the father of modern economics, best known for his works on the principles of free market capitalism.

Free Markets

Economic systems in which the prices for goods and services are determined by the open market and consumers, without government intervention.

Equilibrium Price

The rate in the marketplace at which the volume of goods being offered is the same as the volume of goods being sought.

Equilibrium Quantity

The quantity of a good or service at which demand meets supply.