Business FinancesQuestion 1183 of 1605
If a contractor's overhead is fixed at $10,000 per month and he completes 5 jobs that month, the average overhead absorbed per job is:
a.$1,000
b.$5,000
c.$50,000
d.$2,000
Explanation
Average overhead per job = total monthly overhead / number of jobs = $10,000 / 5 = $2,000. Completing more jobs spreads fixed overhead over more work, lowering the per-job burden.
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