Contribution Margin = Fixed Expenses + Profit
=
$88,580 + $40,850 = $129,430
Variable Expenses = Sales - Contribution
Margin
= $3,01,000 - $1,29,430 = $171,570
|
Total $
|
|
Sales
|
3,01,000.00
|
|
Less: Variable Expenses
|
1,71,570.00
|
|
Contribution Margin
|
1,29,430.00
|
|
Fixed Expenses
|
88,580.00
|
|
Profit
|
40,850.00
|
Profit Volume Ratio = Contribution Margin /
Sales = $1,29,430 / $3,01,000 = 0.43 or 43%
Break Even Sales = Fixed Cost / PV Ratio = $88,580 / 0.43 =
$206,000
Therefore, the correct option is Option C:
$206,000
