Breakeven analysis Paul Scott has a 2008 Cadillac that he wants to update with a

Question

Breakeven analysis Paul Scott has a 2008 Cadillac that he wants   to update with a geo-tracker device so he will have access to road maps and   directions. After-market equipment can be fitted for a flat fee of $500, and   the service provider requires monthly charges of $20. In his line of work as   a traveling salesman, he estimates that this device can save him time and   moneyabout $35 per month (as the price of gas keeps increasing). Breakeven analysis Paul Scott has a 2008 Cadillac that he wants   to update with a geo-tracker device so he will have access to road maps and   directions. After-market equipment can be fitted for a flat fee of $500, and   the service provider requires monthly charges of $20. In his line of work as   a traveling salesman, he estimates that this device can save him time and   moneyabout $35 per month (as the price of gas keeps increasing).

Explanation / Answer

So COntribution per month = 35-20 = 15

So BEP = Fixed cost/Cont pu = 500/15 = 33.33 Months

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