Fixed Variable and Breakeven Points

In: Business and Management

Submitted By moonshade
Words 353
Pages 2
Fixed Variable and Break Even points
David Anderson
HSM/260
July 14, 2013
Melvin Green

Fixed Variable and Break Even points
Fixed Costs, Variable Costs, and Break-Even Point

Part 1

During the sixth month of the fiscal year, the program director of the Westchester Home-Delivered Meals program decides to again recalculate fixed costs, variable costs, and the Break-Even Point using the high to low method. Included here are the number of meals served and the total costs of the program for each of the first six months:

Month Meals Served Total Costs
July (3,500) $20,500
August (4,000) $22,600
September (4,200) $23,350
October (4,600) $24,500
November (4,700) $25,000
December (4,900) $26,000

Recalculate fixed costs, variable costs, and the BEP. What are the variable costs? What are the fixed costs? How many meals will the WHDM program need to provide during the fiscal year to reach the BEP? How much profit will the program earn if it completes its 45,000-meal contract with the City of Westchester?

Meals: High-Low=
Cost: High-Low=

The variable cost per meal:
The variable cost for the low month:
Fixed cost:

(Monthly BEP)
(Fiscal-year BEP)

WHDM program profit analysis
= meal contract
Break Even Point (BEP) =
1,008 Revenue
1,008 Meals at
Total Cost Per meal
Total Profit =

Exercise 10.2

It has been two years since the New River Community Council (NRCC) started its newsletter dealing with state and community funding opportunities for human service agencies. The current number of subscribers to the newsletter is five hundred and twenty five. During the second year, the NRCC hired a new part-time newsletter coordinator (social work student). The NRCC has raised the salary of the part-time newsletter coordinator to $6,000 per year and has also hired another part-time student as an assistant for ten…...

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