2. Warner Tool Company President Dr. John Robinson wantsto know the breakeven po

Question

2. Warner Tool Company President Dr. John Robinson wantsto know the breakeven     point in salesdollars for his company. The following is the partial IncomeStatement for the company:

                     Sales                         $370,000

                     Variableexpenses     $222,000

                     Contribution Margin $148,000

                     Fixedexpenses          $55,000

                     NetIncome               $ 93,000

Compute the breakeven analysis in sales dollars for thecompany.

Explanation / Answer

( Sales - Variable Expenses ) / Sales

55000 / 0.41

Break Even Point in Dollars Fixed Expenses /Contribution margin Contribution Margin

( Sales - Variable Expenses ) / Sales

0.41 Break Even Point

55000 / 0.41

Break Even Point 134146.34

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