What Is the Maximum Percentage of Variable Costs in Relation

question 113

Multiple Choice

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

• A) 30%
• B) 70%
• C) 80%
• D) 90%

---

Definitions:

Strategic Channel Alliance

A collaboration between two or more organizations to use each other's distribution channels to sell their products, thereby extending their market reach.

Backward Integration

Backward Integration is a business strategy where a company expands its role to fulfill tasks formerly completed by businesses up the supply chain, often involving the acquisition of or merger with these businesses.

Vertical Integration

A business strategy in which a company controls multiple stages of production or distribution within the same industry, from raw materials to final product delivery.

Tiffany & Co.

A luxury American multinational jewelry and silverware corporation, known for its diamond and sterling silver jewelry.