Problems - Calculating Fixed Costs, Variable Costs, and Breakeven
Write your answers in the space provided for each of the questions below:
Price x Volume = Fixed Cost + (Variable Cost per Unit x Volume)
1. Find the breakeven price if:
• Volume = 1000
• Variable Cost per Unit=$5
• Total Fixed Cost=$2500
2. Find the breakeven volume if:
• Price = $25
• (Variable Cost per Unit x volume)=$300
• Total Fixed Cost =$5000
3. Find the breakeven total fixed cost if:
• Price = $30
• Variable Cost per Unit=$10
• Volume =10,000
4. Find the breakeven Variable Cost per Unit if:
• Price = $50
• Fixed Cost=$25,000
• Volume =15,000
5. To help you better understand fixed and variable costs, briefly describe what happens to each of the following as volume increases: (Provide a generalization based on the concept rather than a specific number.)
A. Total Fixed Cost?
B. Total Variable Cost?
C. Fixed Costs per Unit?
D. Variable Cost per Unit?
Break-Even Volume=Fixed Costs / Contribution Margin per Unit
6. What is the Contribution Margin per Unit if:
• Fixed Costs = $2500
• Revenue per visit = $150
• Variable Cost per visit = $75
7. What is the Break-Even Volume from the data above? Should the company provide the services if no other costs are added? Why or why not?