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A Company Sells a Single Product That Has a Contribution

question 65

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A company sells a single product that has a contribution margin ratio of 24%. If the company's total fixed costs are $84,000, what is the break-even point in dollar sales?


Definitions:

Annual Depreciation Expense

Annual depreciation expense is the portion of the cost of a fixed asset that is expensed each year over its useful life, reflecting its decrease in value.

Straight-Line Depreciation

A method of allocating the cost of an asset evenly over its useful life, indicating how much of the asset's value has been used up each year.

Accumulated Depreciation Balance

The total amount of depreciation expense that has been recorded against a fixed asset since it was acquired.

Units-Of-Production Depreciation

Method that allocates the depreciable cost of an asset over its useful life based on the relationship of its periodic output or activity level to its total estimated output or activity level

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