Computation of the break even point in sales dollars:-

Variable cost = Variable cost of production + Variable selling & administrative expenses

= $1,500,000 + $550,000

= $2,050,000

Contribution margin ratio = (Sales - Variable cost) / Sales

= ($8,000,000 - $2,050,000) / $8,000,000

= $5,950,000 / $8,000,000

= 74.38%

Break even point in sales dollars = Fixed costs / Contribution margin ratio

= $1,350,000 / 74.38%

= $1,815,126.05 Or $1,815,126