Utah Contractor Practice Exam

What percentage of total sales does Frank's overhead represent if total sales are $10,000 and overhead expenses are $2,500?

1. 12%

2. 18%

3. 22%

4. 25%

The correct answer is: 25%

To find the percentage of total sales that Frank's overhead represents, you need to divide the overhead expenses by the total sales and then multiply by 100 to convert it into a percentage. In this case, the overhead expenses are $2,500 and the total sales are $10,000. The calculation would look like this: 1. Divide the overhead by total sales: $2,500 ÷ $10,000 = 0.25. 2. Convert this to a percentage by multiplying by 100: 0.25 × 100 = 25%. Therefore, Frank's overhead represents 25% of total sales, which confirms that the correct option is the one indicating 25%. Understanding this calculation is essential for contractors as it helps in planning budgets and pricing strategies.