Question

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.

Group of answer choices

$109,000; 10%

$141,000; 21.6%

$76,000; 11.69%

None of the available answers

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.

Group of answer choices

$77,778

$184,210

$155,850

$134,615

Answer 1

Question 1

Correct answer-------------$76,000; 11.69%

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

Correct answer-------------$134,615

Working

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