Breakeven Analysis
1. Traditional Breakeven
Calculate total fixed cost (TFC) and average variable cost (AVC) using regression given the following data:
Admissions Total Cost
200 $1,499,900
400 $2,000,400
600 $2,500,700
800 $2,999,400
1,000 $3,500,400
AVC = _________
TFC = _________
Net Income = $50,000
Price = $4,200
Calculate the breakeven (with net income) volume. Create an income statement proving your calculated volume produces the desired net income. What will happen to net income if actual volume is 10 cases more than breakeven volume?
Calculate breakeven volume if total fixed cost increases by 10%.
Calculate breakeven volume if average cost increases by 10% with the original (part A) TFC.
Complete the table below and create a breakeven graph for 200, 400, 600, 800, and 1,000 admissions.
Total Variable Cost Total Cost
Admissions TFC TVC TC Net Income
200 __________ __________ __________ __________
400 __________ __________ __________ __________
600 __________ __________ __________ __________
800 __________ __________ __________ __________
1,000 __________ __________ __________ __________