What is the percentage of overhead to sales for Acme Plumbing with yearly sales of $367,000 and overhead expenses of $62,000?

To determine the percentage of overhead to sales for Acme Plumbing, you will first need to use the formula:

Percentage of Overhead to Sales = (Overhead Expenses / Total Sales) x 100.

Plugging in the values provided:

Overhead Expenses = $62,000

Total Sales = $367,000

Calculating this gives:

Percentage of Overhead to Sales = ($62,000 / $367,000) x 100

= 0.1687 x 100

= 16.87%.

When rounded, this value is approximately 16.9%. This indicates that for every dollar of sales, roughly 16.9 cents are used to cover overhead expenses, reflecting the operational efficiency and fixed costs associated with running the business.

To arrive at the correct answer, it's crucial to ensure accuracy in both the arithmetic and the rounding process. Understanding this calculation can assist businesses in budgeting and assessing their financial health, as it highlights the relationship between sales and fixed expenses.