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Activity 4
எப்பMdwood
Erik wants to calculate the break-even point for the number of jobs needed for the new
transport service. He has given you the following figures for the first month of operation.
Fixed costs
£60.00
Variable costs for each job £3.50
Selling price for each job £18.50
The formula used to calculate the break-even point for each job is
Break-even point =
Fixed costs
(Selling price - variable cost)
(a) Using the figures given, calculate the break-even point.
(2)
Show your workings.

Respuesta :

Samawati

Answer:

=4 jobs

Explanation:

As per contribution margin theory,

the formula for calculating the break-even point is as below

Break-even  point = fixed cost/ contribution margin per unit

for this transport service

Fixed costs £60

contribution margin per unit = selling price - variable expenses

= £18.50 - £3.50

=£15

Break-even points =£60/£15

=4 jobs

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