I have a case in which I have to review the company's income and determine what they will have to do to make a profit, calculate how many sales and the gross margin. How do I attempt to begin the assignment and will you (the tutor) have to review the case?
To understand the impact gross margin has on profitability, consider this example:
A startup has $100,000 in fixed overhead costs with a projected gross
margin of 50 percent of sales. To cover its overhead and break even,
the startup would need to reach sales of $200,000.
However, with the help of cheaper suppliers and materials (or a
higher unit price) gross margins may increase to 55 percent of sales,
meaning the startup would need to sell less products or services before