ITPEC IP April 2019 Question 68
ITPEC IP April 2019 — Question 68 of 100
Break-even sales are 1,600 million yen. Variable costs total 1,400 + 600 = 2,000 against sales of 4,000, so the variable-cost ratio is 0.5 and the contribution-margin ratio is 1 - 0.5 = 0.5. Therefore break-even sales are 800 / 0.5 = 1,600.
Answer (c)
Why not others:
- 1,200, 1,231, and 2,154 do not cover the 800 fixed cost using the calculated 50% contribution margin at exactly zero profit
Key rule: Break-even sales equal fixed costs divided by the contribution-margin ratio, where that ratio is 1 - variable costs / sales.
AI-generated — may contain errors
The original exam layout is preserved in the image so diagrams, formulas, tables, and code remain accurate.
This question comes from an official ITPEC past paper. ITPEC Practice is an independent study tool and is not affiliated with ITPEC. See the official IP past-paper collection or Report an issue.