Choice "C" is correct. Breakeven point in sales dollars may be computed as the ratio of total fixed costs to the contribution margin ratio. The contribution margin ratio is the contribution margin expressed as a percentage of revenue. In this instance, the contribution margin ratio is equal to the sales price of $80,000 less the variable costs of $20,000 divided by the sales price of $80,000. The contribution margin ratio is therefore:

Breakeven point in dollars is computed using the following formula:

Therefore in this instance, the breakeven point in dollars is:

Choice "d" is incorrect. The breakeven point is not equal to fixed costs.Choice "b" is incorrect. The breakeven point is not equal to total costs from the fact pattern.Choice "a" is incorrect. The breakeven point is not equal to the total sales from the fact pattern.