suppose a retail business sells its commodity at a margin of 25% on all items purchased and sold.moreover the company used a 5% commission as saving expense and 12000 at a fixed cost.find the breakeven revenue
break even point=12000/0.25
48000
to gain this quotation answers
Good
To find the breakeven revenue for the retail business, we need to calculate the total cost and then divide it by the margin percentage.
First, let's calculate the total cost:
1. Start with the fixed cost: $12,000
2. Deduct the commission as a saving expense: $12,000 x 5% = $600
3. Subtract the commission from the fixed cost: $12,000 - $600 = $11,400
Next, let's calculate the breakeven revenue:
1. Divide the total cost by the margin percentage: $11,400 / 25% = $45,600
Therefore, the breakeven revenue for the retail business is $45,600. This means the business needs to generate at least this amount of revenue to cover all costs and break even.