Fixed Costs, Variable Costs, and Break-Even Point
The highest meal minus the lowest meal = 4900-3500=1400
Highest cost minus the lowest cost= 26000-20500=5500
The variable cost could be the two answers from meals and cost divided by each other.
Variable cost =5500/1400=$3.92857142857 or $3.93
Fixed cost is total ...view middle of the document...
93) so 3500*3.93=13755=20500-13755=6,745 Fixed cost 1 =6,745
To find BEP we need to know the formula which is Px=A+Bx
So in 10.3 and 10.5 tables of the reading the price per unit is 5.77 so
X=3,666 monthly BEP SO 3,666*12=43,992 Fiscal year BEP
To get 45,000= so BEP is 43, 992 so subtracting them 1,008 revenue
1,008 meals at 5.77=5,816.16
Total cost is 1,008 at 3.93=3,961.44
Total profit =5,816.16-3961.44=$1,854.72
Annual revenue per subscription =$20.00
Variable cost =$4.50
Annual margin per subscription=20-4.50=15.50
Annual fixed cost=6000+3900=9900
This scenario is feasible because the current staff capacity believe that they can handle 650 newsletters so there is little slack because 650-638.71=11.29. There is room for basically 11 more newsletter subscribers to deliver to.