Alloy Has Annual Fixed Operating Costs of $200,000 and Variable

question 58

Multiple Choice

Alloy has annual fixed operating costs of $200,000 and variable costs of $400 per camper. Total fees charged to campers amount to $600 each. The camp expects 400 campers next summer. Projected government grants are $100,000. How much must Alloy raise from other sources to break even?

• A)$50,000
• B)$30,000
• C)$60,000
• D)$20,000

---

Definitions:

Depreciation Expense

The distribution of a physical asset's cost across its lifespan, mirroring its depreciation over time.

Journal Entries

Records of financial transactions in an accounting system, indicating the accounts and amounts affected.

Salvage Value

The estimated residual value of an asset at the end of its useful life, reflecting what a company expects to recover once the asset is no longer useful.

Useful Life

The estimated duration a fixed asset is expected to be economically usable by a company, affecting depreciation calculations.