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?