Greg owns a small business of selling athletic equipment to retailers. He spends $12,500 annually on transportation. His annual fixed cost is $19,000. His other annual expenses total $4,000. His annual sales are $130,000 and the cost of the goods he sells is $65,000. Calculate Greg's direct costs and his break-point point.
What will be an ideal response?
His direct costs equals $12,500 + $19,000 + $4,000 = $35,500
Break-even = $35,500/[($130,000 ? $65,000)/$130,000] = $71,000
Business
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