A company has total fixed costs of $240000 and a contribution margin ratio of 20%. The total sales necessary to break even are

A) $960000.
B) $1200000.
C) $300000.
D) $288000.

Contribution Margin Ratio

A financial ratio that shows how much of a company's sales revenue is available to cover its fixed costs and contribute to net profit, calculated as contribution margin divided by sales revenue.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, and insurance.