Explore BrainMass

Break-even point calculation

Equation 9-3: B=FC / (P-V), where B = break-even demand, FC = fixed cost of setting up for production, P= unit price, and V = variable cost of production.

A clinic currently sends out its laundry at an average cost of $10 per load. If it acquires its own laundry facilities, at a cost of $500, its average cost per load will fall to $6. What is the break-even point, in loads?

a. 250
b. 125
c. About 62
d. About 31

Solution Summary

This posting provides details on calculation of break-even point using fixed cost, unit cost/variable cost and quantity produced