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Sheridan Corp. had total variable costs of $224,200, total fixed costs of $143,500, and total revenues of $380,000. Compute the required sales in dollars to break even.

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abiolataiwo2015

Answer:

$350,000

Explanation:

Computation for the required sales in dollars to break even.

First step is to calculate the Contribution margin

Revenues $380,000

less Variable costs $224,200

Contribution margin $155,800

Contribution margin ratio = 155,800 / 380,000= 41%

Break even sales in dollars = Total fixed costs / CM Ratio = $143,500/ 41% = $350,000

Therefore the required sales in dollars to break

even is $350,000

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