Answer the following questions using the information below:
Dr. Charles Hunter, MD, performs a certain outpatient procedure for $1,000. His fixed costs are $20,000, while his variable costs are $500 per procedure. Dr. Hunter currently plans to perform 200 procedures this month.
-What is the breakeven point for the month assuming that Dr. Hunter plans to perform the procedure 200 times?
A)40 times
B)30 times
C)20 times
D)10 times

Question

Quizplus · Accepted Answer

The breakeven point is calculated by dividing the fixed costs by the contribution margin per procedure. The contribution margin is the price per procedure ($1,000) minus the variable cost per procedure ($500), which equals $500. The breakeven point is $20,000 / $500 = 40 procedures.

Answer the Following Questions Using the Information Below