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Figuring Out Contributions Needed To Break-Even

Review the financial statements attached and figure out how to compute break-even from these schedules. Identify specific activity in the attached document where you can apply break-even analysis.

Include a discussion of:
A unit of measurement for the activity
Revenue per unit for the activity
Variable costs for the activity
Fixed costs for the period in the activity

If you cannot identify specific actual amounts, make a reasonable estimate (and indicate the method or source of information for that estimate) and apply the tool as if the data were factual.

The response guides students through the document, simplifying the overload of data and getting them started on how to approach this type assignment.

Using data from the American Cancer Society, Inc. and Affiliated Entities Combined Financial Statements. As of and for the Year Ended August 31, 2009 with summarized financial information for the Year Ended August 31, 2008 and Report of Independent Auditors.

Solution Preview

This looks harder than it is because you are given so much information, it is hard to figure out what you need. Break-even requires that you find the fixed versus variable costs, right? Break-even for this non-profit would be contributions enough to cover their fixed costs!

So where are costs? Expense page -- number 5 has all the details. Get this page and ...

Solution Summary

This work instructs the student in how to figure out break-even from the published annual report, simplifying the information "overload" in annual reports and pointing out the pages that are useful and why.

Approximately 250 words, no references.