BREAK-EVEN IN SALES DOLLARS

 The break-even point in sales dollars using several methods. First, we could solve for the break-even point in unit sales using the equation method or the formula method and then multiply the result by the selling price.  the break-even point in sales dollars using this approach would be computed as 350 speakers × $250 per speaker or $87,500 in total sales.We can also solve for the break-even point in sales dollars at Acoustic Concepts using the basic profit equation stated in terms of the contribution margin ratio or we can use the formula for the target profit.  we will use the formula.

Dollar sales target profit = Target profit + Fixed expenses
                                                           CM ratio
                                             

Dollar sales to break even =   0 + Fixed expenses
                                                        CM ratio
                             


Dollar sales to break even =  Fixed expenses
                                                 CM ratio
                           

The break-even point would be computed as follows:

Dollar sales to break even =   Fixed expenses
                                                 CM ratio
                                        =      35,000
                                                  0.40
                                        =    87,500