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: DescriptionCostOffice Space55,000Professional Staff Salaries205,000Insurances50,000Machine Maintenance80,000Website Management30,000On-site workers’ salaries$120,000 per projectAverage Material Cost60% of the project price per projectTable 2: Associated Costs of Q-ConstructionsUse 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.

Break-even point is the minimum level of quantity produced or services provided which would recover…

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Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 4EB: Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all...

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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:

1. The break-even number of projects needed by the company.
2. The income made by the company at break-even.
3. Calculate the new number of projects that need to be completed to maintain a profit of $500,000 per year.

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