Solen Corporation's break-even-point in sales is $860,000, and its variable expenses are 70% of...

Question:

Solen Corporation's break-even-point in sales is $860,000, and its variable expenses are 70% of sales. If the company lost $36,000 last year, sales must have amounted to:

a. $788,000

b. $824,000

c. $740,000

d. $566,000

Contribution Margin:

The contribution margin is a formula and is used by finance managers to make decisions, and it is used in determining the break-even point of sales volume and sales revenues, used in the differential analysis, CVP analysis

Answer and Explanation: 1

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Provided with the following data

  • The break-even sales is $860,000
  • The variable cost is 70% of sales or $602,000

Contribution margin ratio = 1 -...

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Contribution Margin: Definition & Formula

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Chapter 22 / Lesson 20
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Understand what the contribution margin is. Learn the definition of contribution margin and understand its importance in business. Discover how to calculate it through examples.


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