An imaging center has the following information:Revenue per test: $300

QUESTION

An imaging center has the following information:Revenue per test: $300Variable cost per test: $150Total fixed costs: $300,000Calculate the total revenue dollars needed to break-even.
To find our Break Even point we must employ the following profit equation: Total Units x (Sales Price Variable Cost) Fixed Costs = profit To find the break even UNITS (we can find break even revenue from the units) we set our profit figure to zero (hence we break even) and solve for units. Units x (300 150) 300,000 = 0 So Units becomes 2000. We need

to sell 2000 units (tests in this case) to break even. To find the Break Even REVENUE we must multiple our Units Sold by the Revenue per Unit, in this case 300. So our Break Even Revenue is 2000 Units x $300/Unit = $600,000 Hope this helps!

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