Business FinancesQuestion 1218 of 1605
A contractor's fixed monthly overhead is $12,000. In a slow month he completes work generating only $9,000 of contribution margin. His result for the month is:
a.A $3,000 profit
b.A $3,000 loss
c.A $21,000 loss
d.Break-even
Explanation
Contribution margin ($9,000) minus fixed overhead ($12,000) = -$3,000. Because contribution did not cover fixed overhead, the month produced a $3,000 loss.
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