Sales 250,000; Variable production costs 150,000; Fixed production costs 30,000; Gross profit 70,000; Fixed admin costs 50,000; Profit 20,000. What is the break-even point in sales revenue?

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SSC Financial and Cost Accounting P-1 QUESTION #6156

Question 1

Sales $250,000; Variable production costs $150,000; Fixed production costs $30,000; Gross profit $70,000; Fixed admin costs $50,000; Profit $20,000. What is the break-even point in sales revenue?

$100,000
$170,000
$200,000✔️
$230,000

Correct Answer Explanation

Option C ($200,000) is correct.

Contribution = $250,000 − $150,000 = $100,000; CS ratio = 40%

Total fixed costs = $30,000 + $50,000 = $80,000

Break-even sales = $80,000 ÷ 0.40 = $200,000

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