The Gainesville office has monthly fixed overhead of $91,800 and an average gross margin of 18.0% of sales. What monthly sales volume is needed to break even?
Correct Answer
A) $510,000
Break-even sales equal fixed costs divided by gross margin percentage.
Why This Is the Correct Answer
Break-even sales equal fixed costs divided by gross margin percentage.
Why the Other Options Are Wrong
Option B: $16,524
$16,524 is below the supported result for break-even sales; it likely uses the wrong base, period, or account bucket.
Option C: $111,951
$111,951 is below the supported result for break-even sales; it likely uses the wrong base, period, or account bucket.
Option D: $109,800
$109,800 is below the supported result for break-even sales; it likely uses the wrong base, period, or account bucket.
Memory Technique
Break-Even Sales fence: markup starts at cost, margin looks back from price.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Section Three, Financial Analysis, Break-even and Gross Profit; use the job ledger figures in the stem and recompute the same accounting measure.
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 Maitland project team needs a record of unresolved office follow-up items. Which administrative record best supports follow-up?
Next Question
The Dania Beach electronic approval system has this event: new project manager added to approval workflow. Which administrative record should be updated?