Fixed cost is $96,000 and contribution margin ratio is 32 percent. What sales amount breaks even?
Correct Answer
D) $300,000.
Break-even sales are fixed cost divided by contribution margin ratio: $96,000 / 0.32 = $300,000.
Why This Is the Correct Answer
Break-even sales are fixed cost divided by contribution margin ratio: $96,000 / 0.32 = $300,000.
Why the Other Options Are Wrong
Option A: $240,000.
$240,000. is below the supported result for break-even analysis; it likely uses the wrong base, period, or account bucket.
Option B: $288,000.
$288,000. is below the supported result for break-even analysis; it likely uses the wrong base, period, or account bucket.
Option C: $296,000.
$296,000. is below the supported result for break-even analysis; it likely uses the wrong base, period, or account bucket.
Memory Technique
Planning Sales money shelf: cost for markup, price for margin.
Reference Hint
Study anchor (closed-book): memorize Break-even analysis from CSLB Law and Business Study Guide; CSLB 2026 Law Book / CSLB Law and Business Study Guide Business Finances; know the rule or calculation trigger without relying on exam-room lookup.
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