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    Break-even point calculation

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    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

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    Solution Summary

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