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.
This topic, taught in full in the CSLB Law & Business guide. CSLB Law & Business — Complete Study Guide (2026) — PDF + EPUB, $24.99 · 14-day refund →
Practice all 1632 questions free — no signup required.
Own the complete CSLB Law & Business guide — PDF + EPUB, $24.99 →
Related questions on this topic
- A contractor completes $800,000 in revenue with $560,000 direct costs and $160,000 overhead. What is the net profit and net profit margin?
- If a contractor underestimates his overhead rate when bidding, the most likely result is:
- A contractor has fixed costs of $90,000 per year. His contribution margin (price minus variable cost) is 30% of revenue. What annual revenue does he need to break even?
- The break-even point is best defined as the level of sales at which:
- A contractor has $100,000 fixed costs and a contribution margin ratio of 25%. If he wants a $50,000 profit, what revenue is required?
- If a contractor's fixed costs rise while his contribution margin ratio stays the same, the break-even point will:
Last reviewed: · editorial process
PrepPass team · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)