Sabv Corporation's break-even-point in sales is $675,000, and its variable expenses are 75% of sales.If the company lost $24,000 last year, sales must have amounted to:

A) $651,000
B) $579,000
C) $603,000
D) $471,000

Question

Arely Salas · Accepted Answer

Final Answer : B, Explanation :  CM ratio = 1 - Variable expense ratioCM ratio = 1 - 0.75 = 0.25Dollar sales to break even = Fixed expenses ÷ CM ratio$675,000 = Fixed expenses ÷ 0.25Fixed expenses = $675,000 × 0.25 = $168,750Profit = (CM ratio × Sales)- Fixed expenses-$24,000 = (0.25 × Sales)- $168,750Sales = ($168,750 - $24,000)÷ 0.25 = $579,000

Sabv Corporation's break-even-point in sales is $675,000, and its variable expenses are 75% of sales.If the company lost $24,000 last year, sales must have amounted to:

A) $651,000
B) $579,000
C) $603,000
D) $471,000

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Sabv Corporation's break-even-point in sales is $675,000, and its variable expenses are 75% of sales.If the company lost $24,000 last year, sales must have amounted to:A) $651,000B) $579,000C) $603,000D) $471,000

Definitions

Learning Objectives

Learning Objectives

Related questions

Sabv Corporation's break-even-point in sales is $675,000, and its variable expenses are 75% of sales.If the company lost $24,000 last year, sales must have amounted to:

A) $651,000
B) $579,000
C) $603,000
D) $471,000