Calculate the break-even point in hours

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Question - CVP Analysis - The National, Inc. provides support center services of two types: Type A and Type B.

 

Type A

Type B

Total

Total Revenues

$20,000

$45,000

$65,000

Total Variable Costs

$10,000

$15,000

$25,000

Total Fixed Costs

$6,000

$12,000

$18,000

Activities are measured in hours.

The sales price per hour for Type A is $100 per hour, while the sales price per hour for Type B is $150.

The variable cost per hour for both Type A and Type B is $50.

The National has one location. Further, the computers and other communication equipment are shared by both service types. Fixed costs are allocated to the two types based on an estimate first implemented five years earlier, and managers question the reliability of fixed cost estimates.

Required - Use the provided information to calculate the break-even point in hours for the firm as a whole.

Reference no: EM132891942

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