Break-even sales revenue calculation

Steps:

• Identify fixed costs, variable cost ratio, and target profit (zero for break-even).
• Compute contribution margin ratio: (1 - variable cost ratio).
• Apply break-even formula: Fixed costs / contribution margin ratio.
• Multiply by selling price if needed to get sales revenue.

Why D is correct:

• $600,000 matches fixed costs divided by contribution margin ratio using budgeted data.

Why the others are wrong:

• A ignores contribution margin, underestimating revenue needed.
• B misapplies variable costs, yielding partial coverage.
• C overlooks budgeted adjustments, falling short of true break-even.

Not enough information: Full budgeted costs and margins not provided.

Final answer: D