Break-Even Analysis Instructions - Show all steps and calculations to determine

Question

Break-Even Analysis Instructions - Show all steps and calculations to determine the break-even, as well as the break-even for the target profit levels as outlined in the instructions.  Round all decimals UP to next whole number Grooming Day Care Boarding Break-even Units= 158 Break-even Units= 65 Break-even Units= 78 Fixed Costs $ 2,367.92 Fixed Costs $859.39 Fixed Costs $1,378.99 Cont. Margin $      15.03 Cont. Margin $  13.25 Cont. Margin $    17.64 These should be the exact contribution numbers from the previous tab.  I'm not sure how you did your calculation - it should be the fixed costs divided by the contribution margin. Break-Even Analysis Instructions - Show all steps and calculations to determine the break-even, as well as the break-even for the target profit levels as outlined in the instructions.  Round all decimals UP to next whole number Grooming Day Care Boarding Break-even Units= 158 Break-even Units= 65 Break-even Units= 78 Fixed Costs $ 2,367.92 Fixed Costs $859.39 Fixed Costs $1,378.99 Cont. Margin $      15.03 Cont. Margin $  13.25 Cont. Margin $    17.64 These should be the exact contribution numbers from the previous tab.  I'm not sure how you did your calculation - it should be the fixed costs divided by the contribution margin.

Explanation / Answer

Break even point = Fixed cost/Unit contribution margin

Grooming:

Break-even point = 2367.92/15.03 = 157.55 or 158 units (Round off)

Day care:

Break-even point = 859.39/13.25 = 64.86 or 65 units (Round off)

Boarding:

Break-even point = 1378.99/17.64 = 78.17 or 77 units (Round off)

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