Asked by
Vigita Adhikari
on Dec 05, 2024
Verified
Alclear Pool & Spa presently provides a weekly maintenance service to 150 homes. Variable costs amount to approximately $12 per week for labour, mileage, chemicals and other supplies. Fixed costs are approximately $13 000 per quarter (13 weeks) . Customers pay $270 per quarter for the weekly service. All contracts are written for one quarter (13 weeks) .
Determine the number of customers (rounded) to break even.
A) 95
B) 103
C) 114
D) 197
Variable Costs
Expenses that change in proportion to the activity of a business, such as costs for raw materials or production supplies.
Fixed Costs
Expenses that do not change with the level of output or activity, such as rent, salaries, and insurance premiums.
Break-Even
The point at which total revenues equal total costs, resulting in neither profit nor loss.
- Determine the break-even points measured in units and sales revenue.
Verified Answer
MK
Learning Objectives
- Determine the break-even points measured in units and sales revenue.