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Question - ABC companies provides two types of services A and B.
A
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 A is $100 per hour, while the sales price per hour for B is $150.
The variable cost per hour for both A and Type B is $50.
ABC 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.
Required - Use the provided information to calculate the break-even point in hours for the firm as a whole.
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