I need someone to help me calculate the Break Even point for all three year.
2002 Fixed Cost
Rent Utilities $150000.00
Telephone $24000.00
Total $174000.00
2003 Fixed Cost
Rent Utilities $150000.00
Telephone $24000.00
Total $174000.00
2004 Fixed Cost
Rent Utilities $150000.00
Telephone $24000.00
Total $174000.00
2002 Variable Cost
Payroll and Benefits $517004
Supplies $1251013.20
Other $117903
Management $351000
Total $1011008.20
2002 Variable Cost
Payroll and Benefits $520069
Supplies $171622.77
Other $117903
Management $371101
Total $1180695
2004 Variable Cost
Payroll and Benefits $915787.20
Supplies $320525.52
Other $115999
Management $445819
Total $1510130.72
2002 Outputs 2003 Outputs 2004 Outputs
5962 6821 11822
Variable Cost Per Output 2002 Variable Cost Per Output 2003 Variable Cost Per Output 2004
1011008.20/5962= $169.58 1180695/6821= $173.10 1510130.72/11822= $127.74
To calculate the Break Even point for each of the three years, we need to determine the Revenue and the Total Cost for each year.
Step 1: Calculate Revenue
Revenue is calculated by multiplying the number of outputs by the selling price per output. However, the selling price per output is not provided in the given information. Please provide the selling price per output for each year.
Step 2: Calculate Total Cost
Total Cost is the sum of Fixed Cost and Variable Cost. Fixed Cost is the same for all three years ($174,000), but Variable Cost varies for each year.
To calculate the Total Cost, add the Fixed Cost to the Variable Cost.
For example, the Total Cost for 2002 would be:
Total Cost 2002 = Fixed Cost 2002 + (Variable Cost per Output 2002 x Number of Outputs 2002)
Total Cost 2002 = $174,000 + ($169.58 x 5962)
Similarly, calculate the Total Cost for 2003 using the appropriate Variable Cost per Output and Number of Outputs, and repeat the same process for 2004.
Step 3: Calculate Break Even point
The Break Even point is the point at which Total Cost is equal to Revenue. To calculate the Break Even point, divide the Total Cost by the Revenue and multiply by 100.
For each year, calculate the Break Even point using the formula:
Break Even point = (Total Cost / Revenue) * 100
Once you provide the selling price per output, I can help you calculate the Break Even point for all three years.