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HSM-260 wk5 assignment CORRECTED

# HSM-260 wk5 assignment CORRECTED - Running head FIXED COSTS...

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Running head: FIXED COSTS, VARIABLE COSTS, AND BREAK-EVEN POINT. 1 Fixed Costs, Variable Costs, and Break-Even Point. Anna Borsick HSM-260 December 4, 2011 Marilyn Gardner

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FIXED COSTS, VARIABLE COSTS, AND BREAK-EVEN POINT. 2 Fixed Costs, Variable Costs, and Break-Even Point. Exercise 10.1 response: What are the variable costs? The cost of an item varies with the amount of service provided. For instance the cook’s salary is fixed, but the number of meals provided each day is not; this fluctuation includes food costs. The variable cost of the WHDM program is \$165,000 which will include food, supplies, disposable food containers, paper cups, and gasoline for delivering trucks. What are the fixed costs? The fixed costs are only items of cost that will not vary with amount of service provided. Such as, the wages of the meals prepared, rent, and telephone and insurance expenses. According to page 139 (Martin L., 2001) the fixed costs for the WHDM is \$95,000. The fixed cost of this program includes the cook’s salary, equipment rental, and the agency’s indirect in overhead costs. How many meals will the WHDM program need to provide during a fiscal year to reach BEP? (Break Even Point) Break Even Point is the amount of human services provided for the program in order to reach the BEP. So, the Break Even Point for WHPM’s program is 43,716 in order for them to recover their fixed costs. This figure was accomplished by
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HSM-260 wk5 assignment CORRECTED - Running head FIXED COSTS...

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