Assume that sales are predicted to be $26,250, the expected contribution margin is $10,500, and a net loss of $1,750 is anticipated. The break-even point in sale Select one: O a. 21,875 O b. 28,000 O c 30,625 O d. 14,583 O e. 20417

Assume that sales are predicted to be $26,250, the expected contribution margin is $10,500, and a net loss of $1,750 is anticipated. The break-even point in sale Select one: O a. 21,875 O b. 28,000 O c 30,625 O d. 14,583 O e. 20417

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 7DQ

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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

50is anticipated. The break-even point in ales (5) is:

Assume that sal=s are predicted to be $26,250, the expected contribution margin is $10,500, and a net loss of $1,750 is anticipated. The break-even point in sales
Select one
O a. 21,875
Ob.28,000
Oc30,625
Oa.14.583
O.e
20417

Expert Solution

Step 1

Breakeven Sales Revenue

It is that volume of sales that are required to meet the total cost. Breakeven sales represent how many sales a company needs to achieve so as to cover up its cost.

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