Assuming Total Cost for a Direct Channel of $100,000 and an Average

question 9

Multiple Choice

Assuming total cost for a direct channel of $100,000 and an average gross margin on sales of 25%,the sales volume needed to cover these costs would be:

• A) $2,500,000.
• B) $25,000.
• C) $75,000.
• D) $400,000.
• E) $250,000.

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Definitions:

Break-Even Point

The level of production or sales volume at which total revenues equal total expenses, resulting in zero profit or loss.

Fixed Costs

Costs that do not fluctuate with the level of production or sales, such as rent and salaries.

Sales Mix

The ratio of various goods or services contributing to a company's overall sales.

Break-Even Point

The point at which total revenues equal total costs, and the business is neither making a profit nor incurring a loss.