CIMA BA2 · Chapter 10 · Question 3 of 12
A product sells for $24 per unit and has a contribution to sales (C/S) ratio of 37.5%. Fixed costs are $270,000 per period. What is the breakeven point in sales REVENUE?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) $720,000
Explanation
Breakeven revenue = fixed costs / C/S ratio = $270,000 / 0.375 = $720,000. Check: 30,000 units x $24 = $720,000.
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