Doctor J.is considering purchasing a new blood analysis machine for $60,000.He estimates that he could charge $80.00 for an office visit to have a patient's blood analyzed,while the variable cost of a blood analysis would be $30.00. How many blood analyses would he have to perform in order to break even?

Question

Quizplus · Accepted Answer

To calculate the break-even point, we use the formula: Break-even point = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). Here, Fixed Costs = $60,000, Selling Price per Unit = $80.00, and Variable Cost per Unit = $30.00. Thus, Break-even point = $60,000 / ($80 - $30) = $60,000 / $50 = 1,200 analyses.

Doctor JIs Considering Purchasing a New Blood Analysis Machine for $60,000