Mario Jimenez sells electrical supplies.His annual sales equal $450,000.His total fixed costs annually equal $75,000.The cost of goods sold annually is $335,000.Mario works an average of 240 days a year and 8 hours each day.Mario makes an average of five sales calls per day.Mario's break-even volume per hour is approximately:

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
Hours worked per year = 240 x 8 = 1,920 hours
Mack's cost per hour = $75,000/1,920 = $39.06
Break-even volume per hour = cost per hour/gross profit % = $39.06/25.6% = $152.58

Mario Jimenez Sells Electrical Supplies