What is the breakeven point from the given below information?
fixed costs $20,000
variable costs 33% of sales
avg selling price is $10,000
a) As % of sales, what is its variable or contribution margin?
b) If the average sale is $10,000 what is the contribution margin/vehicle?
c)
1. what is the breakeven volume in $ of revenue?
2. what is breakeven in units (knowking no one wishes to buy 2/3 or 1/5 of a car)
d) If fixed costs increased to $30,000, what would breakeven be?
e) Why do we care about breakeven, and cost-volume-profit?