Business FinancesQuestion 337 of 1605
A contractor's fixed overhead is $9,000 per month and variable costs are 75% of revenue. If the contractor produces $30,000 of revenue in a month, what is the net result for that month?
a.A profit of $1,500
b.Break-even (zero)
c.A loss of $1,500
d.A profit of $7,500
Explanation
Variable costs = 75% × $30,000 = $22,500. Total costs = $22,500 + $9,000 fixed = $31,500. Result = $30,000 − $31,500 = a $1,500 loss, because revenue is below the break-even point of $36,000.
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