Fulton Corporation purchases leather sofas for resale. The cost of each leather sofa is $1200 less 13%. Operating expenses are 10% of cost. Policy is to have a 15% mark-up on selling price. In order to breakeven Fulton has to sell each leather sofas at a markdown of 10%.

Question

Quizplus · Accepted Answer

The information provided does not allow for a direct calculation of the break-even point based on the markdown percentage alone. Break-even analysis would require understanding the fixed costs and how the combination of variable costs and selling price (after any markdowns) covers those costs. The statement conflates various percentages (discounts, markups, operating expenses) without directly linking them to a break-even analysis that incorporates all relevant costs and revenues.

Fulton Corporation Purchases Leather Sofas for Resale