A Company Has Fixed Costs of $90,000

question 31

Multiple Choice

A company has fixed costs of $90,000. Its contribution margin ratio is 30% and the product sells for $75 per unit. What is the company's break-even point in dollar sales?

• A) $60,000.
• B) $128,571.
• C) $180,000.
• D) $210,000.
• E) $300,000.

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Definitions:

Machinery

Equipment or devices designed for a specific purpose, often used in manufacturing or industrial processes.

Investing Activities

Transactions and events that relate to the investment of the company’s cash, including acquisitions and disposals of long-term assets and other investments not included in cash equivalents.

Cash Flows

The net amount of cash being transferred into and out of a business.

Operating Activities

The principal revenue-producing activities of the entity and other activities that are not investing or financing activities.