Break-Even Analysis Instructions - Show all steps and calculations to determine
ID: 424216 • Letter: B
Question
Break-Even Analysis Instructions - Show all steps and calculations to determine the break-even, as well as the break-even for the target profit levels as outlined in the instructions. Round all decimals UP to next whole number Grooming Day Care Boarding Break-even Units= 158 Break-even Units= 65 Break-even Units= 78 Fixed Costs $ 2,367.92 Fixed Costs $859.39 Fixed Costs $1,378.99 Cont. Margin $ 15.03 Cont. Margin $ 13.25 Cont. Margin $ 17.64 These should be the exact contribution numbers from the previous tab. I'm not sure how you did your calculation - it should be the fixed costs divided by the contribution margin. Break-Even Analysis Instructions - Show all steps and calculations to determine the break-even, as well as the break-even for the target profit levels as outlined in the instructions. Round all decimals UP to next whole number Grooming Day Care Boarding Break-even Units= 158 Break-even Units= 65 Break-even Units= 78 Fixed Costs $ 2,367.92 Fixed Costs $859.39 Fixed Costs $1,378.99 Cont. Margin $ 15.03 Cont. Margin $ 13.25 Cont. Margin $ 17.64 These should be the exact contribution numbers from the previous tab. I'm not sure how you did your calculation - it should be the fixed costs divided by the contribution margin.Explanation / Answer
Break even point = Fixed cost/Unit contribution margin
Grooming:
Break-even point = 2367.92/15.03 = 157.55 or 158 units (Round off)
Day care:
Break-even point = 859.39/13.25 = 64.86 or 65 units (Round off)
Boarding:
Break-even point = 1378.99/17.64 = 78.17 or 77 units (Round off)