When finding the break even point, I know that total fixed costs/contribution margin= Break Even Point, but is that answer in dollars? How do you find the sales volume (dollars) that need to be produced in order to break even? How do you find the required amount of hours that someone must work in order to produce the desired amount of a product?
To find the break-even point, the formula you mentioned, Total Fixed Costs divided by Contribution Margin, gives you the sales volume needed to cover all costs and break even. However, this calculation gives you the sales volume, not in dollars, but in units required to be produced or sold.
To determine the sales volume in dollars needed to break even, you can multiply the break-even point (in units) by the selling price per unit. This will give you the sales volume needed to cover all costs and reach the break-even point in dollars.
To find the required amount of hours an individual must work to produce a desired amount of a product, you need to know the labor productivity or the number of units produced per hour. Once you have this information, you can divide the desired quantity by the labor productivity rate to determine the number of hours required to produce the desired amount of product. This calculation assumes that the labor productivity remains constant.
It's important to note that these calculations are based on certain assumptions and may not account for all factors, such as demand fluctuations, variable costs, or other considerations that can affect the final results. It's always advisable to consider these factors and seek professional advice if needed.