Question

Bramble Corp. has two divisions—Standard and Premium. Each division has hundreds of different types of tennis racquets and tennis products. The following information is available: Standard Division Premium Division Total Sales $400000 $600000 $1000000 Variable costs 220000 300000 Contribution margin $180000 $300000 Total fixed costs $300000 What is the break-even point in dollars? $144000. $625000. $1363636. $461538.

Answer 1

Here Answer is $625000

Calculated as

Total sale of both divisions = $1000000

Total Variable cost of both the division = $520000

Total Contribution = $1000000-$5200000 = $480000

Contribution margin = $480000*100/$1000000 = 48%

Breakeven point = Fixed Cost/contribution margin = $300000/48% = $625000

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