Ryan Hester sells building supplies.His annual sales equal $450,000.His total fixed costs annually equal $75,000.The cost of goods sold annually is $335,000.Ryan's break-even point in terms of total sales is approximately:
A) $198,000
B) $218,600
C) $224,000
D) $293.000
E) $315,200

Question

Quizplus · Accepted Answer

Gross profit = annual sales - cost of goods sold = $450,000 - $335,000 = $115,000
Gross profit percentage = Gross profit/sales = $115,000/$450,000 = 25.6%
BEP = Fixed costs/gross profit % = $75,000/25.6% = $292,968.75

Ryan Hester Sells Building Supplies