Explore BrainMass
Share

Explore BrainMass

    How do you conduct a break even analysis and can one be done with the following information, using the numerical calculations break-even analysis?

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    How do you conduct a break even analysis and can one be done with the following information, using the numerical calculations break-even analysis?

    A County Sheriff's Department sells its products (officers) to contract cities at a cost of $197,000 per officer. Each officer works 40 hours per week. The contract city purchased 21 officers for the 2006-2007 fiscal year. They have 11 vehicles. It has the following annual costs:
    Item Annual costs
    Rent $1,100,000
    Officer salaries $86,000
    Vehicle maintenance and fuel $11,500 per vehicle

    © BrainMass Inc. brainmass.com October 9, 2019, 7:46 pm ad1c9bdddf
    https://brainmass.com/business/finance/conduct-break-even-analysis-one-done-128930

    Solution Preview

    Here: We first need to separate the variable cost and fixed cost. Variable cost is the cost which increases directly in proportion of the sales. Hence, officer's salary is a variable cost. Rest contracts are generally long term and one cannot change the rent expenses once the commitment is made. Thus, it is a fixed cost. Now the point of confusion is vehicle cost. ...

    Solution Summary

    The expert conducts a break even analysis for a county Sheriff''s department. A contract city purchase is examined.

    $2.19