Sophia's Delivery Service charges a $55 service fee. The variable cost per service run is $22. The company's fixed expenses amount to $6,200. If the operating income equals fixed expenses, what is the breakeven point in sales revenue for Sophia's Delivery Service

the breakeven point in sales revenue for Sophia's Delivery Service is  $10,333

Explanation:

Break even point is the point where a firm neither makes a Profit nor a loss

Break even point (Sales Revenue) = Fixed Costs / Contribution Margin Ratio

                                                         = $6,200 / (($55- $22)/$55)

                                                         =  $6,200/ 0.6

                                                         =   $10,333

The breakeven in sales value is $10,333.33

Explanation:

Breakeven in sales=fixed expenses/contribution margin*service fee charged

Fixed expenses is $6,200

Contribution margin=service fee per run-variable cost per run

service fee per run is $55

variable cost per run is $22

contribution margin per run=$55-$22=$33

breakeven in sales=$6,200/$33*$55

breakeven in sales=187.8787879 *$55

breakeven in sales value=$10,333.33  

Break-even sales is the sales revenue expected when the company makes no profit and no loss

if you use only 25 for your entertainment and only 200 for the groceries that you really need and take out the 50 per month for the computer then that should be enough