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# Calculating Contribution Margin and Break Even Point

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The following is for a Capital setting:

Fixed cost = \$4,000,000
Variable costs per member = \$200
Enrollment fee per member = \$400
Target profit = \$600,000

1. Determine the contribution margin for this practice.

2. Determine the accounting break even point in the terms of number of Enrollees.

3. Determine the economic break even point in terms of number of Enrollees.

#### Solution Preview

1. Determine the contribution margin for this practice.

Variable costs per member =V= \$200
Enrollment fee per member =P= \$400
Contribution Margin=P-V=400-200=\$200 per enrollment

2. Determine the ...

#### Solution Summary

Solution describes the steps to calculate contribution margin and break even point in accounting & economic terms.

\$2.49