Asked by Ariana Khojandpour on Jul 15, 2024
Verified
A small business calculates that its monthly fixed costs are $4,200. If the business calculates it contribution rate to be 0.32, what level of monthly sales must be generated in order to break even?
Contribution Rate
The percentage or amount that is contributed to a retirement or investment plan, usually on a regular basis, by an employer, employee, or both.
Monthly Sales
The total revenue generated from sales activities within a calendar month.
- Evaluate the threshold where the sale of units and the generated income from a product or service match the expenditure involved.
- Calculate the level of sales required to achieve a specific financial goal, including breaking even or earning a targeted net income.
Verified Answer
ST
Learning Objectives
- Evaluate the threshold where the sale of units and the generated income from a product or service match the expenditure involved.
- Calculate the level of sales required to achieve a specific financial goal, including breaking even or earning a targeted net income.