Choice "D" is correct. Break even analysis can be used to calculate the required sales dollars to produce breakeven using the following formula:

The fact pattern indicates that variable costs are 25% of sales. By extension, contribution must be 75% of sales (100%-25%). Break even in sales dollars is computed using the formula above based upon fixed costs given at $30,000:

Choice "a" is incorrect, per computation above.Choice "b" is incorrect. The proposed answer implies that there are no variable costs.Choice "c" is incorrect. The proposed answer of $120,000 divides fixed costs by variable costs expressed as a percentage of sales in error.