A Small Business Calculates That Its Monthly Fixed Costs Are

question 94

Short Answer

A small business calculates that its monthly fixed costs are $3,200. If the business calculates it contribution rate to be 0.42, what level of monthly sales must be generated in order to break even?

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Definitions:

Monetary

Relating to money or currency, particularly in terms of monetary policy or monetary economics.

Collateral

An asset offered as security for repayment of a loan, forfeitable in the event of default.

Reorganization Plan

A strategy adopted by a company to restructure its business operations, finances, or structure to enhance efficiency or recover from financial distress.

Creditors

Individuals or institutions that lend money or extend credit, and are owed by borrowers or debtors.