Roberts Tobacco Company Has Fixed Costs of $10,000

question 116

Multiple Choice

Roberts Tobacco Company has fixed costs of $10,000.Their contribution margin ratio is 40% and ratio of selling expenses to sales is 20%.What is the breakeven point in sales dollars?

• A)$50,000
• B)$25,000
• C)$4,000
• D)$2,000

---

Definitions:

Straight-Line Depreciation

A method of evenly distributing the cost of an asset over its useful life.

Salvage Value

Salvage value is the estimated residual value of an asset at the end of its useful life, indicating what a company expects to recover or sell the asset for.

Depreciation Expense

The calculated apportionment of the price of a tangible asset over the duration it is useful.