Fixed Costs 11 - Meal cost is 5.25 times 1,008 total cost...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Fixed Costs, Variable Costs, and Break Even Points Gail Jones Meals: High-low= 4,900 -3,500=1,400 Cost: High-Low= 26,000-20,500= 5,500 The variable cost per meal is: 3.93 Dividing 5,500 by 1,400 13,755 is the low month variable cost. The fixed cost $20,500- (3,500 - 3.93) – 6,745 5.25 -3.93 = 1.32 ……1.32 divided by 6745 = 5109 (monthly BEP) 3666 x 12= 61308 (fiscal year BEP) Meal contract =45,000 Break Even point=43,992 The total cost for preparation of the meals is 3.93 each which cost 3,961.44
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Meal cost is 5.25 times 1,008 total cost would be $5,292.00 Total profit 1,330.56 Exercise 10.2 New River Community Council Break Even Point PX=A=BX 20 x -9,900 +4.50 x 20x -9,900 + 4.50 x 20x 4.50 x-9,900 + (4.50 x-4.50 x) 15,5x = 9,900 15.5x=9,900 divided by 15.5 x X=639 Maximum Number = 650 BEP=639 Surplus capacity =11 I think the new BEP is feasible because there is a surplus of 11 which they are making a profit and not going into the red....
View Full Document

Page1 / 2

Fixed Costs 11 - Meal cost is 5.25 times 1,008 total cost...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online