A West Melbourne startup expects monthly fixed overhead of $54,500 and average gross margin of 16.0% of sales. What monthly sales volume is needed to break even?
Correct Answer
B) $340,625
Break-even sales equal fixed overhead divided by gross margin percentage.
Why This Is the Correct Answer
Break-even sales equal fixed overhead divided by gross margin percentage.
Why the Other Options Are Wrong
Option A: $8,720 ownership review memo
$8,720 ownership review memo is below the supported result for startup break-even; it likely uses the wrong base, period, or account bucket.
Option C: $64,881 office launch checklist
$64,881 office launch checklist is below the supported result for startup break-even; it likely uses the wrong base, period, or account bucket.
Option D: $70,500 bonding support file
$70,500 bonding support file is below the supported result for startup break-even; it likely uses the wrong base, period, or account bucket.
Memory Technique
Prepares West money shelf: cost for markup, price for margin.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Builder's Guide to Accounting, Break-even and gross profit planning; verify the startup duty, registration, or financial setup before answering.
More Business & Finance Questions
The Cedar Key subcontract closeout file requires 44 final releases, and 31 have been received. How many releases are missing?
A Florida GC prepaid $18,000 for annual insurance and expenses it evenly by month. After 7 months have expired, what prepaid asset remains?
The West Miami system access list starts with 22 active users, adds 4, and removes 7. How many active users should remain?
The Winter Park bank review shows a bank balance of $124,600, book balance of $119,400, and known timing items of $3,200. What unexplained difference remains?
The Riverview bank review shows a bank balance of $87,500, book balance of $90,400, and known timing items of $1,600. What unexplained difference remains?
A Satellite Beach contractor had 4 separations during the quarter and an average headcount of 32. What turnover rate should HR report?
A Winter Park startup budgets monthly overhead of $61,500 and wants a 4-month operating reserve. What reserve should be funded?
A Royal Palm Beach customer account has unpaid approved invoices of $126,000. Company policy requires review when unpaid invoices exceed $100,000. What status applies?
A Wildwood contractor had 9 separations during the quarter and an average headcount of 60. What turnover rate should HR report?
A Clermont field group had 64 absence hours out of 1280 scheduled hours. What absence rate should be reported?
People Also Study
Related Study Resources
Previous Question
The Gulf Breeze operating account review finds this issue: unlisted outstanding check. Which administrative response is most appropriate?
Next Question
The Parkland sales/use-tax audit lists taxable construction purchases of $94,000 and tax support of $94,000. What status should be reported?