# Richard's Breakeven Point Calculations

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.