The total fixed cost for Harold, a salesperson, is $20,000 per month. Harold generates 25% gross profit on the products he sells. If Harold sells $200,000 worth of merchandise in six months, which of the following statements is true?
A. Harold generated $30,000 gross profit for the company.
B. By having Harold, the company incurred a direct loss of $70,000.
C. Harold generated $120,000 in gross profit for the company.
D. By having Harold, the company incurred a direct loss of $280,000.
E. Harold sold $120,000 worth of goods, which equals the BEP.
Answer: D
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