Question

Pauley Company provides home health care. Pauley charges $35/hour for professional care. Variable costs are $21/hour and fixed costs are $78,000. Next year, Pauley expects to charge out 12,000 hours of home health care. What is the break-even point in sales dollars?

Answer 1

Answer:

$195000.05

Explanation:

His fixed costs and variable costs must be made equal to his selling price in order to gauge the break even point in hours.

$78000 + $21x = $35x

78000 = 35x - 21x

78000 = 14x

x = 5571.428...

Rounded of : x = 5571.43 hours

break even point in terms of sales dollars :

5571.43 x 35 =  $195000.05