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    Richard's Breakeven Point Calculations

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    Rewrite the formula above, to make it appropriate for breakeven calculations

    All these ques. refer to data listed:

    Where is Richard's breakeven point"

    Fixed costs $20,000
    Variable costs 33% of sales avg sellings price is $10,000

    a. as a % of sales, what is its variable or contribution margin?

    b. If the avg. sale is $10,000 what is the c. margin/vehicle?

    c. what is the breakeven volume in $ or revenue

    d. what is the breakeven in units keeping in mind that no one wishes to buy 2/3 or 1/5 of a car.

    e. if fixed cost increased to $30,000 then what would breakeven be?

    f. Why do we care about all this breakeven, and cost-volume-profit things.

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    Solution Preview

    Where is Richard's breakeven point"
    Fixed costs $20,000
    Variable costs 33% of sales
    Avg. Selling price is $10,000

    a. As a % of sales, what is its variable or contribution margin?
    Variable margin = 0.33SP, where SP is the selling price

    b. If the avg. sale is $10,000 what is the c. margin/vehicle?
    Cost margin per vehicle = 0.33*10,000 = 3,300

    c. what is the ...

    Solution Summary

    The expert examines Richard's breakeven point calculations.

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