Business FinancesQuestion 305 of 1632
A contractor's fixed monthly costs total $18,000 and variable costs run 60% of revenue. What monthly revenue is needed to break even?
a.$45,000
b.$30,000
c.$10,800
d.$18,000
Explanation
Break-even revenue = Fixed Costs ÷ (1 − Variable Cost Ratio) = $18,000 ÷ (1 − 0.60) = $18,000 ÷ 0.40 = $45,000.
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