What Is the Maximum Percentage of Variable Costs to Sales

question 62

Multiple Choice

What is the maximum percentage of variable costs to sales that a firm could have and still break even with $5 million in revenues,$1 million in fixed costs,and $500,000 of depreciation?

• A) 30%
• B) 70%
• C) 80%
• D) 90%

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Definitions:

Market Matching

A strategy used by businesses to align their offerings, products, or services with the demands and needs of the market.

Strategic Compensation

The design and implementation of compensation systems to align employee rewards with the organization's strategic objectives.

Business Objectives

Goals and targets that a business aims to achieve in a set period.

Compensation Systems

Structured plans implemented by businesses to reward and provide financial benefits to employees for their work and performance.