Solen Corporation's break-even-point in sales is $890,000, and its variable expenses are 70% of...

Question:

Solen Corporation's break-even-point in sales is $890,000, and its variable expenses are 70% of sales.

If the company lost $39,000 last year, sales must have amounted to:

a. $851,000

b. $812,000

c. $760,000

d. $584,000

Break-even Sales

Break-even Sales refer to the level of sales which generate income that is sufficient to cover total costs incurred. It presents the level which a company needs to keep an eye not to fall below because doing so would mean they'd be incurring losses. The goal is at least to generate sales above that break-even area in order to generate profits, as well.

Answer and Explanation: 1

Become a Study.com member to unlock this answer!

View this answer

The incurrence of loss means that the company generated a contribution margin which is not enough to cover its fixed costs.Hence, the contribution...

See full answer below.


Learn more about this topic:

Loading...
Break-Even Analysis: Definition & Example

from

Chapter 4 / Lesson 3
13K

A break-even analysis utilizes a price calculation formula to determine how much product a business must sell and at what price in order to make a profit. Learn how to apply this analysis through examples with fixed and variable costs, and discover the importance of a margin of safety.


Related to this Question

Explore our homework questions and answers library