Baljeevans Burgers has sales of 250 units, a sales revenue of textsterling26 500, total variable costs of textsterling12 340 and total fixed costs of textsterling4 600 (all annual figures). Calculate the Total Contribution

BREAK EVEN POINT

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Baljeevans Burgers has sales of 250 units, a sales revenue of £26 500, total variable costs of £12 340 and total fixed costs of £4 600 (all annual figures). Calculate the Total Contribution

A	£56.64
B	£14 160
C	£14 410
D	£566.40

Explanation:

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.

Detailed explanation-2: -Variable Cost Formula. To calculate variable costs, multiply what it costs to make one unit of your product by the total number of products you’ve created. This formula looks like this: Total Variable Costs = Cost Per Unit x Total Number of Units.

Detailed explanation-3: -Take your total cost of production and subtract your variable costs multiplied by the number of units you produced. This will give you your total fixed cost.

Detailed explanation-4: -Break-even point in units = Fixed costs ÷ Contribution margin per unit.

There is 1 question to complete.

ECONOMICS

COST ACCOUNTING

BREAK EVEN POINT