Saheed is planning to run a small web hosting business this year for fellow college students. He can rent a web server for $100 per month. He estimates it will cost
$10/month per web page hosted, and he intends to charge a flat rate of $20 to every customer for initial setup fees.
a) What is the contribution rate that Saheed's business is expected to generate?
b) What is Saheed's break-even level of revenue per month?
c) How many web pages per month must Saheed host in order to break even?

Question

Quizplus · Accepted Answer

The Answer of Saheed is planning to run a small web hosting business this year for fellow college students. He can rent a web server for $100 per month. He estimates it will cost
$10/month per web page hosted, and he intends to charge a flat rate of $20 to every customer for initial setup fees.
a) What is the contribution rate that Saheed's business is expected to generate?
b) What is Saheed's break-even level of revenue per month?
c) How many web pages per month must Saheed host in order to break even?

Saheed Is Planning to Run a Small Web Hosting Business