Question

# part 1) A construction company has total revenues of \$650,000; total construction costs of \$509,000; and...

part 1)

A construction company has total revenues of \$650,000; total construction costs of \$509,000; and general overhead costs of \$65,000 for the year. Determine the company's total profit for the year and the percentage of the construction revenues that become profits.

\$109,000; 10%

\$141,000; 21.6%

\$76,000; 11.69%

part 2)

A construction company estimates it's fixed overhead to be \$35,000, sales expenses of 19%, and direct costs of 55%. In order to break even the company must achieve a total sales volume of ___________. Select the closest answer.

\$77,778

\$184,210

\$155,850

\$134,615

Question 1

Working

 Income Statement Sales revenue \$              650,000 Less: Total contruction cost \$            (509,000) Less: General overhead \$              (65,000) Net income \$                 76,000 Net income ratio (76000/650000) 11.69%

Question 2

Working

 CM ratio (100-19-55) 26% Fixed cost \$           35,000.00 Breakeven sales (35000/26%) \$        134,615.38