Q-Constructions has tasked you to investigate the number of construction projects per year for which the company would need to break-even and make a profit of $500,000 per year. The average price of a building contract is $700,000 per project. The following are the fixed and variable costs of Q-Constructions in Table 2: Description Cost Office Space 55,000 Professional Staff Salaries 205,000 Insurances 50,000 Machine Maintenance 80,000 Website Management 30,000 On-site workers’ salaries $120,000 per project Average Material Cost 60% of the project price per project Table 2: Associated Costs of Q-Constructions Use this information above to complete the requested analyses below. Calculate: The break-even number of projects needed by the company. The income made by the company at break-even. Calculate the new number of projects that need to be completed to maintain a profit of $500,000 per year.
Q-Constructions has tasked you to investigate the number of construction projects per year for which the company would need to break-even and make a profit of $500,000 per year. The average price of a building contract is $700,000 per project. The following are the fixed and variable costs of Q-Constructions in Table 2: Description Cost Office Space 55,000 Professional Staff Salaries 205,000 Insurances 50,000 Machine Maintenance 80,000 Website Management 30,000 On-site workers’ salaries $120,000 per project Average Material Cost 60% of the project price per project Table 2: Associated Costs of Q-Constructions Use this information above to complete the requested analyses below. Calculate: The break-even number of projects needed by the company. The income made by the company at break-even. Calculate the new number of projects that need to be completed to maintain a profit of $500,000 per year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Q-Constructions has tasked you to investigate the number of construction projects per year for which the company would need to break-even and make a profit of $500,000 per year. The average price of a building contract is $700,000 per project. The following are the fixed and variable costs of Q-Constructions in Table 2:
|
Description |
Cost |
|
Office Space |
55,000 |
|
Professional Staff Salaries |
205,000 |
|
Insurances |
50,000 |
|
Machine Maintenance |
80,000 |
|
Website Management |
30,000 |
|
On-site workers’ salaries |
$120,000 per project |
|
Average Material Cost |
60% of the project price per project |
Table 2: Associated Costs of Q-Constructions
Use this information above to complete the requested analyses below.
Calculate:
-
- The break-even number of projects needed by the company.
- The income made by the company at break-even.
- Calculate the new number of projects that need to be completed to maintain a profit of $500,000 per year.
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