Business FinancesQuestion 1118 of 1605
A contractor's fixed (overhead) costs are $60,000/year. Each job nets $2,000 of contribution margin. How many jobs must he complete to break even?
a.12 jobs
b.20 jobs
c.30 jobs
d.60 jobs
Explanation
Break-even units = fixed costs / contribution margin per job = $60,000 / $2,000 = 30 jobs. Below 30 jobs he loses money; above 30 he earns profit.
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