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    Contribution margin and breakeven

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    The following data pertain to service offered in a fee-for service setting:

    Fixed Cost = $9000
    Variable Cost = $300
    Charge $450
    Target profit = $6000

    1. Determine the contribution margin for this service

    2. Determine the accounting break-even point in terms of volume.

    3. Determine the economic break-even point in terms of volume.

    © BrainMass Inc. brainmass.com June 4, 2020, 12:36 am ad1c9bdddf
    https://brainmass.com/business/accounting/contribution-margin-break-even-348750

    Solution Preview

    1. Contribution margin = Selling Price - Variable cost = 450 - 300 = $150 per unit

    2. ...

    Solution Summary

    The solution explains the calculation of contribution margin, accounting break-even and economic break-even point.

    $2.19

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