To cover indirect and direct costs through additional sales, what must be calculated?

To cover both indirect and direct costs through additional sales, it is essential to calculate the sum of both types of costs. This sum represents the total cost that needs to be accounted for in order to achieve break-even or profitability.

Direct costs are those costs that can be traced directly to the production of goods or services, such as materials and labor. Indirect costs, on the other hand, are overhead expenses that cannot be directly tied to a specific product, such as utilities, rent, and administrative salaries.

By determining the total of both direct and indirect costs, a business can strategically set pricing and sales goals. This knowledge ensures that sales will not only cover direct expenses but also contribute to covering the fixed costs that support the overall operations of the business. Therefore, understanding the complete cost structure is crucial for making informed decisions about pricing, volume of sales needed, and maintaining profitability.

Other options focus on one type of cost alone, neglecting the comprehensive view required to make effective financial decisions.