What is the correct fixed cost listed for a massage therapist's break-even analysis?

In a break-even analysis, fixed costs represent the expenses that do not change regardless of the volume of services provided. For a massage therapist, fixed costs could include rent for the treatment space, insurance, salaries for non-commissioned staff, licensing fees, and equipment that must be purchased regardless of service demand.

The correct answer indicates that the total fixed costs amount to $245,400, which is a substantial investment necessary for the operation of the massage therapy practice. This figure would likely encompass several components: a competitive rental space conducive to providing massage services, an allocation for ongoing professional insurance, and potentially depreciation on expensive equipment like tables and massage tools.

Understanding the significance of fixed costs in establishing how many services must be sold to cover all expenses is crucial. This knowledge allows entrepreneurs to strategically price their services and forecast when they will begin to turn a profit.