Stacker requires sales of $500,000 to cover its fixed costs of $100,000 and to earn net income of $80,000.What percent are variable costs of sales?

Name: Stacker requires sales of $500,000 to cover its fixed costs of $100,000 and to earn net income of $80,000.What percent are variable costs of sales?
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Question

Quizplus · Accepted Answer

Variable costs are calculated as a percentage of sales by subtracting the desired net income and fixed costs from sales, then dividing by sales. Here, ($500,000 - $100,000 - $80,000) / $500,000 = 64%.

Stacker Requires Sales of $500,000 to Cover Its Fixed Costs