A company's break -even point in sales is $725,000, and its

Question

variable expenses are 75% of sales. If the company lost $18,100
last year, sales must have amounted to

Answer 1

To find the sales amount, we need to determine the fixed expenses first.

Fixed expenses = Sales - Variable expenses
Fixed expenses = $725,000 - (0.75 * $725,000)
Fixed expenses = $725,000 - $543,750
Fixed expenses = $181,250

Since the company lost $18,100, we can subtract this from the fixed expenses to find the sales amount.

Sales = Fixed expenses + Loss
Sales = $181,250 + $18,100
Sales = $199,350

Therefore, sales must have amounted to $199,350 last year.