The manager at vertical wire productions reported total sales revenue of $800,000. the variable expenses were $600,000, and there were $125,000 of total fixed expenses. use the contribution margin shortcut formula to predict the breakeven point in dollars.

Explanation:

The first step will be  get the contribtuion margin:

800,000 - 6000,000 = 200,000

This is the amount after variables cost used to pay the fixed cost and make a gain.

Second, we calcualte the contribution margin ratio

200,000/800,000 = 0.25

Per dollar of sales 25 cents are available to pay the fixed cost.

Now, we calculate the break even point in dollars

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