ACCT 206 Week 4 - E1919

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E19-19 Impact on breakeven point if sale price, variable costs, and fixed costs Change Dependable Drivers Driving School charges $250 per student to prepare and administer written and driving  tests. Variable costs of $100 per student include trainers' wages, study materials, and gasoline. Annual fixed  costs of $75,000 include the training facility and fleet of cars. Requirements:  I.  For each of the following independent situations, calculate the contribution margin per unit and the breakeven  point in units by first referring to the original data provided: a. Breakeven point with no change in information. Contribution Margin Per Unit = Sales Per Unit – Variable Costs Per Unit Contribution Margin Per Unit = $250 - $100 Contribution Margin Per Unit = $150 Break Even Point in Units = Total Fixed Costs ÷ Contribution Margin Per Unit Break Even Point in Units = $75,000 ÷ $150 Break Even Point in Units = 500 Units b. Decrease sales price to $220 per student. Contribution Margin Per Unit = Sales Per Unit – Variable Costs Per Unit Contribution Margin Per Unit = $220 - $100 Contribution Margin Per Unit = $120 Break Even Point in Units = Total Fixed Costs ÷ Contribution Margin Per Unit
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This note was uploaded on 03/01/2012 for the course ACCOUTNING 550 taught by Professor Abner during the Spring '11 term at DeVry Houston.

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ACCT 206 Week 4 - E1919

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