A Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for 20 per unit. Variable costs are 8 per unit, and fixed costs total 180,000 per year. Answer the following independent questions:
(b) Use the CM ratio to determine the break-even point in sales dollars.

Fixed costs of the company are $180,000 and the contribution margin ratio is 60% and so the break-even point in sales dollar is calculated as fixed costs of $180,000 divided by 60% which gives $300,000. The company will therefore have to make sales revenue of $300,000 in order to break even.

The break-even point is the point at which total costs equal total sales. In other words, there is no loss and no profit for SMEs. This means that we have reached a stage of production where the cost of production equals the revenue of the product.

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A Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for 20 per unit. Variable costs are 8 per unit, and fixed costs total 180,000 per year. Answer the following independent questions: (b) Use the CM ratio to determine the break-even point in sales dollars.

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A Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for 20 per unit. Variable costs are 8 per unit, and fixed costs total 180,000 per year. Answer the following independent questions:
(b) Use the CM ratio to determine the break-even point in sales dollars.