The Break-Even Equation And Profit Calculation

1.What are the formulas for: ◦The basis break-even equation ◦The basis breakeven equation expanded to include indirect costs and desired profit?

2.Explain the relationship between step-five costs and the relevant range.

3.Based on the product margin, when is it in the best interests of an organization to continue or drop a service?

4.Laurie Vaden is a nurse practitioner with her own practice. She has developed contracts with several large employers to perform routine physical, fitness for duty exams, and initial screening of on-the-job injuries. She currently sees 150 per month, charging 450 per visit. Her total costs are $7,500, of which $1,500 is for supplies. She has decided that she needs to increase profit, so she is considering raising her fee to $65. She expects to lose 10 percent of her business to competitors that charge an average of 460 per visit.