The total fixed cost for Harold, a salesperson, is $20,000 per month. Harold generates 25% gross profit on the products he sells. If Harold sells $200,000 worth of merchandise in six months, which of the following statements is true?
A) By having Harold, the company incurred a direct loss of $70,000.
B) Harold generated $120,000 in gross profit for the company.
C) Harold sold $120,000 worth of goods, which equals the BEP.
D) By having Harold, the company incurred a direct loss of $280,000.
E) Harold generated $30,000 gross profit for the company.

Question

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The Answer of The total fixed cost for Harold, a salesperson, is $20,000 per month. Harold generates 25% gross profit on the products he sells. If Harold sells $200,000 worth of merchandise in six months, which of the following statements is true?
A) By having Harold, the company incurred a direct loss of $70,000.
B) Harold generated $120,000 in gross profit for the company.
C) Harold sold $120,000 worth of goods, which equals the BEP.
D) By having Harold, the company incurred a direct loss of $280,000.
E) Harold generated $30,000 gross profit for the company.

The Total Fixed Cost for Harold, a Salesperson, Is $20,000