The Highland Racquet Club found that with annual fixed costs of $60,000, its breakeven point is 2,000 members when the membership charge is $60 per person per year. What is the variable cost per person for Highland?
A) $45
B) $50
C) $30
D) $25
E) $40

Question

Quizplus · Accepted Answer

Breakeven point = Fixed costs / (Price per person - Variable cost per person)
Therefore, 2000 = 60000 / (60 - Variable cost per person)
Variable cost per person = $30.

The Highland Racquet Club Found That with Annual Fixed Costs