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A contractor has fixed overhead of $54,000 and expects a 27 percent gross margin. What sales volume is needed to cover overhead?

Correct Answer

B) $200,000.

Sales needed equals fixed overhead divided by gross margin: $54,000 / 0.27 = $200,000.

Answer Options
A
$145,800.
B
$200,000.
C
$216,000.
D
$254,000.

Why This Is the Correct Answer

Sales needed equals fixed overhead divided by gross margin: $54,000 / 0.27 = $200,000.

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