PMBreakeven point

Upto the sales of 1.5mil, the contribution is 45%. But, for the incremental sales above 1.5mil, the variable costs fall to 52%, hence the contribution would be 48% of incremental sales. Now, breakeven is achieved when Contribution = Fixed Costs From 1.5mil sales, the contribution is $675,000. So, another $625,000 ($1,300,000-$675,000) will be needed from the incremental sales to cover fixed costs and achieve breakeven. This extra contribution of $625,000 will be 48% of incremental sales i.e C/S ratio is 48%. Hence we can divide $675,000 by 48% to find out the sales revenue, which is $1,302,083 or $1.302mil.

We can verify this: At Breakeven point, Contribution = Fixed Costs ($1,500,000*45%) + ($1,302,083*48%) = $1,300,000 $675,000+$625,000 = $1,300,000

Glad to hear that :) and welcome