ECONOMICS

Detailed explanation-1: -To calculate the break-even point in units use the formula: Break-Even point (units) = Fixed Costs ÷ (Sales price per unit – Variable costs per unit) or in sales dollars using the formula: Break-Even point (sales dollars) = Fixed Costs ÷ Contribution Margin. Here’s What We’ll Cover: What Is the Break-Even Point?

Detailed explanation-2: -Break-even point in units = Fixed costs ÷ Contribution margin per unit. Your break-even point in units will tell you exactly how many units you need to sell to turn a profit. If you’re able to sell more units beyond this point, you’ll be making a profit.

Detailed explanation-3: -If a hospital’s sales are $500, 000, variable costs are $200, 000 and fixed costs are $240, 000, what is the contribution margin ratio? Answer: D-If a hospital’s sales are $500, 000, variable costs are $200, 000 and fixed costs are $240, 000, the contribution ratio is 60%.

Detailed explanation-4: -How to calculate a break-even point based on units: Divide fixed costs by the revenue per unit minus the variable cost per unit. The fixed costs are those that do not change no matter how many units are sold.