The following data pertain to service offered in a fee-for service setting:
Fixed Cost = $9000
Variable Cost = $300
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
1. Contribution margin = Selling Price - Variable cost = 450 - 300 = $150 per unit
The solution explains the calculation of contribution margin, accounting break-even and economic break-even point.